• Employee/contractor decision tool

    Use the Employee/contractor decision tool to find out whether your worker is an employee or contractor for tax and super purposes.

    Employees work in your business and are part of your business.

    Contractors run their own business and provide services to your business.

    Who should use the decision tool?

    If your business engages and pays workers, you should use this decision tool.

    The tool is not designed for situations where you:

    • enter into an agreement with a company, partnership or trust for them to provide a worker
    • obtain workers through an intermediary such as a labour hire or on-hire firm
    • are a labour hire or on-hire firm.

    What this decision tool gives you

    After answering some questions about the working arrangement, you will receive a report that gives you:

    • an answer about whether your worker is an employee or contractor for tax and super purposes
    • a summary of the responses you have provided
    • information about the tax and super obligations you need to meet.

    Provided your responses accurately reflect the working arrangement:

    • you can rely on the result provided by the tool
    • we will not charge you a penalty that might otherwise apply if we review the arrangement in the future and find you have not met your pay as you go withholding obligations for the worker.

    For record keeping purposes keep a copy of the decision tool result.

    The decision tool is free and you will remain anonymous at all times. We do not record any personal information.

    Important information

    This Employee/contractor decision tool:

    • provides guidance on the status of a worker - or class of workers - under the laws we administer
    • is based on Taxation Ruling TR 2005/16External Link and Superannuation Guarantee Ruling SGR 2005/1External Link that discuss the various indicators the courts have considered in establishing if a person, engaged by another individual or entity, is an employee within the common law meaning of the term
    • does not provide guidance on other federal, state and territory government obligations you may need to meet - for example, payroll tax obligations.

    We have made every effort, including consultation with community groups and tax professionals, to make sure this decision tool reflects commercial practices.

    Next steps:

    Are you engaging a worker in the building and construction industry?

    Last modified: 28 Aug 2013QC 19387