If you're hiring workers or staff, it's important to understand the difference between contractors and employees, as you have different responsibilities depending on the status of the worker. These responsibilities relate to: 

  • workers' compensation
  • superannuation
  • payment and payroll tax
  • insurance
  • hours of work
  • tools and equipment
  • leave.

The Australian Taxation Office (ATO) checks how businesses engage their workers, and you will face penalties and charges if you incorrectly treat an employee as a contractor. The taxation, super, and other government obligations differ considerably for contractors and employees.

Fair Work Ombudsman will provide you with the information you need to identify whether someone is an employee or a contractor.

Last updated: 28 November 2023