• Equipment, tools and other assets

    When working out whether a worker is an employee or contractor for tax and super purposes, one of the factors to consider is whether your business or the worker is responsible for providing the equipment, tools and other assets (such as heavy machinery or motor vehicles) needed to do the work.

    When considering this factor don't include any:

    • equipment, tools and other assets that are of incidental use and therefore not strictly needed to do the work (for example, a hammer used by a real estate agent to put up a 'for sale' sign)
    • motor vehicles that are exclusively used for travelling to and from work.

    Your business is responsible for providing the equipment, tools and other assets

    This is a characteristic of an employee.

    Your business is considered responsible for providing the equipment, tools and other assets if either:

    • your business provides all or most of the equipment, tools and other assets needed to do the work, or
    • your worker provides all or most of the equipment, tools and other assets needed to do the work, but your business provides the worker with an allowance or reimburses them for the cost of the equipment, tools and other assets.

    Example

    Henry works at a golf club as a greenkeeper. He's responsible for the upkeep of the golf course greens, tees, fairways, rough and surrounds, and general landscaping maintenance.

    Henry brings along a few inexpensive hand tools of his own which he prefers using. The golf club provides all the other equipment, tools and assets to complete the work, including:

    • greens mower
    • tractor
    • slasher
    • spreader
    • line trimmer.

    Although Henry provides some tools, the golf club is considered responsible for providing the equipment, tools or other assets as they provide the majority of the equipment, tools and assets needed to do the work.

    End of example

    The worker is responsible for providing the equipment, tools and other assets

    This is a characteristic of a contractor.

    The worker is considered responsible for providing the equipment, tools and other assets if they both:

    • provide all or most of the equipment, tools and other assets needed to do the work, and
    • don't receive an allowance or reimbursement for the cost of the equipment, tools and other assets.

    Example

    Jeff is a garden maintenance worker who has a contract with a business to maintain their lawns and gardens on a fortnightly basis.

    Jeff provides all his own equipment and tools to complete the job including a lawnmower, line trimmer, blower vac, hedge trimmer and garden hand tools. He also has his own vehicle and trailer to transport the equipment and tools to the business's premises.

    Each fortnight when the lawns and gardens are maintained to the agreed standard, the business pays Jeff the amount specified in the contract (they don't provide any other payments to Jeff).

    Jeff is considered to be responsible for providing the equipment, tools and other assets as he:

    • has provided all his own equipment, tools and vehicle to complete the job
    • doesn't receive an allowance or reimbursement from the business.
    End of example

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    Last modified: 22 Feb 2016QC 33187