Employee or contractor - tax and super obligations compared

You:

• put money aside to cover the tax owed from your contracting work (or you have a voluntary agreement for the business to take tax out of payments they make to you)
• complete and lodge activity statements you get from the ATO
• report and pay GST on an activity statement if you are registered
• keep records of your income (including invoices you issue) and business expenses
• complete your tax return and the business and professional items schedule using your records
• look after your own super unless you are contracted mainly for your labour
• provide your own business insurances, including personal income protection for yourself and workers' compensation for anyone working for you
• put money aside to pay for any holidays or if you get sick
• work out if you are receiving personal services income. 

You:

• provide your tax file number (TFN) to your employer by filling out a TFN declaration and the employer withholds tax from your salary and wages
• keep records for any work-related expenses
• complete your tax return using the payment summary or income statement from your employer(s) and other information provided by the ATO's prefilling service to assist you
• can choose which super fund your employer super contributions are paid into.

The business:

• pays you for the work you do based on the working arrangement, generally after you have submitted an invoice.

The business:

• pays you your wages or salary on a weekly, fortnightly, or monthly basis
• withholds tax from the money they pay you and sends it to us
• provides you with a payment summary after the end of the financial year
• makes super contributions as required into your super fund
• pays you any sick leave, annual leave and any other leave you may entitled to
• provides workers compensation and insurances
• provides pay and conditions as required by the Fair Work Ombudsman.