• Before you hire a worker

    Before you enter into a work agreement or contract with a worker:

    • check that they're legally allowed to work in Australia  
      • Australian citizens, permanent residents and New Zealand citizens are legally allowed to work here
      • if you believe the worker is a foreign national (other than a New Zealander), you must carry out further checksExternal Link to confirm they have a visa with permission to work (you'll need their visa number to check)
       
    • check whether the worker will be an employee or contractor  
      • you can use the Employee/contractor decision tool
      • it's important you get this right – it affects your tax, super and other obligations, and it's against the law to wrongly treat your employees as contractors.
       

    Watch:

     

    Employee – definition

    Generally, an individual is an employee if they:

    • are paid for time worked
    • receive paid leave – for example, sick, annual, recreation or long service leave
    • are not responsible for providing the materials or equipment needed to do their job
    • must perform the duties of their position
    • agree to provide their personal services
    • have work hours set by an agreement or award
    • are recognised as part of your business
    • don't take commercial risks and can't make a profit or loss from the work done.

    Contractor – definition

    Contractors run their own business. They agree to produce a particular result for an agreed price and in most cases they:

    • are paid for results achieved
    • provide all or most of the necessary materials and equipment to complete the work
    • are free to pay someone else to do the work instead of them
    • have freedom in the way the work is done
    • provide services to the general public and other businesses
    • are free to accept or refuse work
    • are in a position to make a profit or loss.

    The contractor may be an individual, partnership, trust or company.

    Next steps:

    See also:

    Last modified: 24 Nov 2016QC 47987