• Common myths

    Don't get caught out by common myths about being a contractor. You need to consider all the terms and conditions of your working arrangement to help you decide if you're a contractor or employee.

    Common myths:

    You must have an ABN to work

    Just because a job advertisement says you must have an ABN doesn’t mean that you will automatically be a contractor. Even if you have an ABN, you may not be a contractor for every job you do. You may not be a contractor at all.

    Some businesses advertise jobs as 'must have ABN' as a way of lowering their costs.

    The work is only for a day or two

    The length of a job or how often you work does not determine if you're a contractor or an employee. Depending on the tasks and the working arrangements, short-term work can be employment.

    Both contractors and employees can be used for:

    • casual, temporary, on call and infrequent work
    • busy periods
    • short jobs, specific tasks and projects.

    These arrangements alone do not determine whether you're a contractor or an employee.

    You want to be a contractor

    Just because you want to be a contractor doesn’t mean the business you are working for can engage you as a contractor. It's not just about what you want – it's the working arrangement you agree to that makes the difference.

    If you should be classified as an employee but the business you work for treats you as a contractor, they can face penalties and charges for not meeting their employer tax and super obligations.

    The business decides you're a contractor

    Many employers don't understand the differences between being a contractor or an employee, and can get the working arrangement wrong.

    Whether you're a contractor or employee is determined by the terms and conditions in your working arrangement – what you agreed to and how it will be done. A business can't just decide to treat you as a contractor.

    Everyone else in the industry has to have an ABN

    Just because everyone in an industry treats their workers as contractors doesn't mean that you'll be a contractor. If you're an employee for tax and super purposes, your boss cannot choose to treat you as a contractor.

    You have a contract

    If you're legally an employee, entering into a contract with the business you work for specifying you're a contractor makes no difference to the true working relationship and will not:

    • override the real employment relationship or change you into a contractor
    • change the tax and super obligations the business is required to meet on your behalf.

    If the business you work for should be treating you as an employee, you don't have to wait until the arrangement ends to make the change. You can talk to the business, seek legal advice or get help from the Fair Work Ombudsman.

     

    Last modified: 09 Jun 2015QC 43439