Employee or contractor?

Contractors, including independent contractors and subcontractors, run their own business and sell their services to others. Contractors will often use their own processes, tools and methods to complete their work. They may negotiate their own fees and working arrangements, and can work for more than one client at a time.

Contractors do have workplace rights and protections but have different responsibilities relating to insurance, tax and super.

In general:

• Independent contractors work for themselves and are their own boss.
• Employees work in someone else’s business. The employer controls how, where and when they do their work, and pays them a wage.

But you need to consider a range of factors when deciding whether someone is an employee or contractor.

To help you decide:

• Check the differences between employees and contractors on the Australian Taxation Office website. This will help you to work out your business’s tax and super obligations.
• Read the Fair Work Ombudsman’s independent contracting page for the differences for workers. You’ll also find information on minimum pay, working conditions and protections.

If you’re still not sure, consider getting independent legal advice.

A labour hire agency may hire a labour hire worker as either an employee or contractor. The agency is responsible for providing their employees with employment entitlements such as leave.

If you engage a labour hire worker, you'll pay the agency a fee for their services.