How to determine if workers are employees or contractors

Penalties and other charges

If you incorrectly treat an employee as a contractor, you can face penalties and charges for not meeting your required employee obligations.

These penalties and other charges include:

• PAYG withholding penalty for not meeting your PAYG withholding obligations
• super guarantee charge for not meeting your super obligations, made up of
• super guarantee shortfall amounts (amount of super contributions which should have been paid into a complying fund)
• interest
• an administration fee.

Unlike super guarantee contributions, the super guarantee charge is not deductible.