Engaging Staff as a Contractor

Do you know the difference between an independent contractor and an employee? 

The following list provides a summary of indicators to help 'weigh' up which classification is the right one:

• what degree of control do you have over how the work is performed?

• who sets the hours of work?

• is there an expectation of ongoing work?

• who bears the financial risk?

• is there an entitlement to superannuation contributions?

• who supplies the tools/equipment?

• do you make a deduction for PAYG or are they responsible for their own tax?

• is there regularity to the payments? do they issue an invoice?

• are they entitled to paid leave?

Sometimes the balance is a close one leaving both parties confused about what their entitlements and obligations are. 

It is important then to minimise the risk to your business and ensure the relationship is defined and your obligations to each other are recorded in a valid contract.