It is very important to understand if someone is an independent contractor or an employee. You also need to know the difference between the two.

Businesses that treat employees as contractors may not meeting their tax and super obligations, and deny workers their employee entitlements.

Independent contractors work for themselves and are their own boss:

• The worker is paid for a result achieved based on the quote provided

• The worker provides all or most equipment, tools and other assets required to complete the work

• The worker takes commercial risks, as they are legally responsible for their own work and liable for the cost of rectifying any defect in their work
•   The worker has the freedom in the way the work is done, subject to the specific terms in any contract or agreement

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Employees work in someone else’s business:

• The worker is paid either: for the time worked, a price per item or activity, or a commission
• The business provides all or most equipment, tools and other assets required for the worker to complete the work
• The worker takes no commercial risks, as the business is legally responsible for the work done by the worker and liable for the cost of rectifying any defect in the work
• The business has the right to direct the way which the worker does their work

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If you have any other questions, please don't hesitate to give us a call.

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