You might even call yourself an independent contractor, sub-contractor or a ‘subbie’. Contractors have different tax and super obligations to employees. You need an Australian business number (ABN), and you need to pay tax and super. You’re not entitled to paid leave if you get sick or injured.
Do subcontractors count as employees?
They usually negotiate their own fees and working arrangements and can work for more than one client at a time. Independent contractors are often called contractors or subcontractors. Whether a worker is a contractor or an employee is determined by the nature of the relationship, not what the arrangement is called.
Is a contractor considered self-employed?
If you are an independent contractor, you are self-employed. To find out what your tax obligations are, visit the Self-Employed Tax Center. You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done).
Can a subcontractor be a sole trader in Australia?
Many subcontractors, especially when it comes to tradesmen, operate as sole traders. As a sole trader there is no separation between your business and personal finances when it comes to taxation. As a sole trader you will have to apply for an Australian Business Number (ABN) to be quoted on your invoices.
What happens to your business when you become a subcontractor?
When switching to subcontracting there are a few decisions that will need to be made. You need to decide on your own business structure, which will in turn impact on your tax affairs and other financial matters, as well as other responsibilities such as your subcontractors insurance and superannuation.
Do you have to be registered for GST if you have an ABN?
Having an ABN doesn’t mean that you also have to be registered for GST. The invoice should not quote GST, if it does then get another issued.
Do you have to be an employee or contractor in Australia?
A worker isn’t automatically a contractor just because they have specialist skills or you only need them during a busy time. You need to consider the whole working arrangement. The easiest way to determine someone’s status is to use the Australian Tax Office’s (ATO) employee/contractor decision tool.
