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Employee or contractor - tax and super obligations

A guide to the tax and super obligations when working as an independent contractor compared to an employee.

Last updated 10 June 2024

The table below outlines the main tax and super obligations a business has when you're working for them as an independent contractor compared to working as an employee.

Comparison of independent contractors and employees for you and the business

As an independent contractor

As an employee


  • 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. 



  • 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 pre-filling 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.