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What is the difference between employee vs contractor – are you confused?

If you are a business owner or you work in a business (particularly the building industry), you need to be aware of a number of factors that affect the way employees and contractors are identified for Australian income tax and superannuation purposes. For example, employees have PAYG withholding tax withheld from their regular pay and they are entitled to superannuation guarantee (currently for the 2015-16 year is 9.50% of their gross wage).

The Tax Office has focused heavily on this area having discovered that many workplace agreements in place are in fact incorrect…

It is important to note that no single indicator can determine if a person is a contractor or an employee. Each determination is based on the individual merits of the work arrangement in place. For a confidential discussion regarding your workplace agreement why not contact Ask Us Tax? We can provide advice and guide you in the right direction. Simply contact us here.

There are a number of indicators that distinguish an employee from an independent contractor. Please see below for a comprehensive comparison.

Employee or Contractor