Are you an Employee or Contractor?

We often receive enquiries from employers and employees asking whether thay can or should engage workers as an employee or a contractor. The ATO provides a decision tool to help solve issues and questions.

The ATOs explanation of the tool is as follows:

"The decision tool is designed to help you (as a payer) understand whether your individual workers are employees or contractors in order to comply with your Commonwealth tax and superannuation obligations. It is not designed for situations where you enter into an agreement with a company, partnership or trust for them to provide a worker, or obtain workers through an intermediary such as a labour hire firm, or where you are a labour hire firm."

After answering a series of questions, the tool generates a report which will give:

a a decision of employee or contractor (for Commonwealth taxation and superannuation purposes) for this particular arrangement
a a summary of the information you have provided
a the basis of the decision, and
a a summary of your Commonwealth taxation and superannuation obligations relating to the worker.

Uses remain anonymous at all times. No personal information is transmitted to the Tax Office.

We recommend employers and workers to use this tool. Here is the link >>> Employee/contractor decision tool.

By D Maynard
CEO My Tax Zone

Copyright 2014. My Tax Zone.