Employee or Contractor – Information on the ATO Website

In our September edition, we published an article which discussed “Sham Contracting” arrangements and the risks posed to employers who make the mistake of classifying their workers as contractors rather than employees.
To assist employers in avoiding any confusion regarding this issue, the ATO has included information which is useful to determine whether a worker is an employee or contractor on its website at www.ato.gov.au.

To access the information, click on the “Businesses” tab, highlight the “Pay staff” heading and then click on the Employee or contractor link.
The Employee or contractor link also contains an Employee/contractor decision tool which employers or workers can use to determine whether a worker is an employee or contractor.

After answering some simple questions about your working arrangements, an employer or worker can obtain a report which will provide an answer on whether a worker is an employee or contractor. The report will also provide information about tax and superannuation obligations an employer may need to meet.

The decision tool is free and can be completed anonymously.
If you are unsure of whether your business may be engaging in sham contracting arrangements, you may wish to visit the ATO website and use the tool to check to see that you are following the law correctly. If you would like more advice on this issue, please contact Steven Hayles.