Contractor or employee? How to get it right

When is a worker an independent contractor or an employee? Plenty of people ask this question as it can expose businesses and individuals to significant risk and costs under tax and employment law.

Sometimes, a person might seek a contracting relationship for perceived tax benefits or the company might want to keep employment flexible. However, by law, it is the nature of the employment relationship that defines whether someone is a contractor or an actual employee. No one can opt out of basic employment standards and entitlements or their statutory tax and superannuation requirements.

So what are the differences between a contractor and an employee? Let’s break it down.

The nature of the employment situation is usually obvious, although project work of fixed duration or finite funding can be complicated. If you’re still not sure, contact us for advice on differentiating between your employees and contractors.

 

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