Employee or contractor?
Last Updated: 05 November 2020
Contractors
Contractors run their own business and sell their services to others, unlike employees who work in someone else’s business.
Contractors — sometimes called independent contractors, sub-contractors or subbies — generally use their own processes, tools and methods to complete the work. They usually negotiate their own fees and working arrangements, and can work for more than one client at a time.
Contractors have workplace rights and protections but have different responsibilities relating to insurance, taxation and superannuation.
Understanding contracts
If you are a contractor, you should understand:
Differences between an employee and a contractor
Whether you are an employee or a contractor depends on many different factors.
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, you should consider getting independent legal advice.
If you believe your employer is incorrectly treating you as a contractor
Contact the:
- Fair Work Ombudsman – call 13 13 94
- Australian Building and Construction Commission if you work in the construction industry (this could be sham contracting) – call 1800 003 338