• Contractor – checklist

    On this page:

    Contractor starts

    If the contractor is a company, partnership or trust, go to contractor working for you.

    If the contractor is an individual:

    • If this is the first time you're hired a worker, complete the checklist Hiring workers for the first time before continuing.
    • Check your working arrangements to know whether the person will be a contractor or employee – if the person is really an employee, use the employee checklist.
    • The contractor may wish to enter a voluntary agreement for you to deduct PAYG withholding amounts from their payments. This arrangement helps the contractor manage their tax by making contributions towards their expected income tax liability.
    • If the contractor is eligible for super guarantee, check if they're eligible to choose a super fund. If so    
      • give the contractor a Standard choice form (or equivalent) within 28 days of them starting, so they can nominate their preferred super fund
      • check that the fund they've nominated is a complying fund
      • if the contractor gives you their tax file number, you must give it to their super fund the next time you make a payment for them, or within 14 days, whichever is the later
      • you'll need to set up an electronic system to report and pay your super contributions using SuperStream.
    • Start keeping records about the contractor – you'll need these to meet your tax and any super obligations.

    See also:

    Contractor working for you

    PAYG

    If the contractor doesn't provide you with their ABN:

    If the contractor is an individual who has a PAYG withholding voluntary agreement with you:

    If you have to withhold PAYG amounts for any reason:

    • if you haven't withheld before you need to register for PAYG withholding straightaway
    • report and pay the PAYG withholding amounts to us in your BAS which is usually quarterly or monthly for most businesses. Business withholding more than $1 million per year report and pay more often.

    See also:

    Super

    If the contractor is an individual and eligible for super:

    • work out how much super to pay
    • use SuperStream to report and pay super contributions by the due date electronically
    • you may have to pay the super guarantee charge if you don't pay enough super for an eligible contractor by the due date
    • contractors can ask to change their choice of super fund
    • if the contractor gives you their tax file number, you must give it to their super fund the next time you make a payment for them, or within 14 days, whichever is the later.

    See also:

    Building and construction industry

    If you're in the building and construction industry, you must report the total payments you make to each contractor for building and construction services. The payments are reported in a Taxable payments annual report – it's due by 28 August each year.

    There are specific payments you don’t report on the Taxable payments annual report, such as some PAYG withholding payments.

    Other obligations

    You will have other obligations when employing people including preventing unlawful discrimination in your workplace, and supporting working parents, people with a disability and those with carers responsibilities.

    See also:

    Keep records of all of the above.

    Contractor leaves

    For contractors who don't provide you with their ABN:

    When the contractor is an individual who has a PAYG withholding voluntary agreement with you:

    If the contractor is an individual who is eligible for super guarantee, work out how much super to pay as normal and pay the final contribution by the due date, usually 28 days after the end of the quarter.

    Keep records of all of the above.

    Ensure the reason and manner your contractor leaves complies with anti-discrimination laws.

    See also:

    Last modified: 17 Jul 2017QC 47990