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.
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.
If you're planning to hire a worker, check that they're legally allowed to work in Australia, and whether they'll be an employee or contractor.