Do you hire independent contractors in your business? Sometimes a person’s status as an independent contractor or employee just isn’t clear cut. Before entering into a contract, it’s important that you understand the differences between employees and independent contractors.
The Tax Office have released a handy little online tool to help you decide whether your workers are employees or contractors. Individual workers can also use it to work out their status.
Once you have answered a series of questions, you’ll be provided a report that will give:
- a decision of employee or contractor (for Commonwealth tax and superannuation purposes) for this particular arrangement
- a summary of the information you’ve provided
- the basis of the decision
- a summary of your Commonwealth tax and superannuation obligations relating to the worker.
No personal info will be sent to the ATO so you will remain anonymous at all times.
There are two versions of the online decision tool:
- for workers in the building and construction industry, check out the Building and construction industry – employee/contractor decision tool
- for all other workers, refer to Employee/contractor decision tool.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
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