If your worker is an employee you'll need to:
- withhold tax (PAYG withholding) from their wages and report and pay the withheld amounts to us
- pay super, at least quarterly, for eligible employees
- report and pay fringe benefits tax (FBT) if you provide your employee with fringe benefits.
If your worker is a contractor:
- they generally look after their own tax obligations, so you don't have to withhold from payments to them unless they don't quote their ABN to you, or you have a voluntary agreement with them to withhold tax from their payments
- you may still have to pay super for individual contractors if the contract is principally for their labour
- you don't have FBT obligations.
Remember, it's against the law to wrongly treat an employee as a contractor so you need to check that you've got it right. If you don’t get it right, penalties may apply.
See also:
- Your workers checklists to work out tax and super obligations.
- Fringe benefits tax (FBT)