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  • Your tax and super obligations

    Your tax, super and other government obligations vary depending on whether your worker is an employee or contractor.

    If your worker is an employee you'll need to:

    • withhold tax (PAYG withholding) from their wages and report and pay the withheld amounts to us
    • pay super, at least quarterly, for eligible employees
    • report and pay fringe benefits tax (FBT) if you provide your employee with fringe benefits.

    If your worker is a contractor:

    • they generally look after their own tax obligations, so you don't have to withhold from payments to them unless they don't quote their ABN to you, or you have a voluntary agreement with them to withhold tax from their payments
    • you may still have to pay super for individual contractors if the contract is principally for their labour
    • you don't have FBT obligations.

    Remember, it's against the law to wrongly treat an employee as a contractor so you need to check that you've got it right. If you don’t get it right, penalties may apply.

    See also:

    Last modified: 06 Jan 2017QC 33192