Employee Vs Contractor - Just Because they have an ABN does not mean they are a contractor

Employee Vs Contractor


How to determine if workers are employees or contractors
To correctly determine whether a worker is an employee or contractor, you need to look at the whole working arrangement. A worker isn’t automatically a contractor just because they have an ABN or specialist skills or you only need them during busy periods.

Records you need to keep
Your business will need to keep records to support your decision on whether your worker is an employee or contractor and the factors you relied on.

Your obligations
Your tax, super and other government obligations will vary depending on whether your worker is an employee or contractor.



An independent contractor is not strictly part of your business. They provide a specific service, and their contract ends when that service ends. Independent contractors run their own business. They usually negotiate their own fees and working arrangements and can work for more than one client at a time. Independent contractors are called contractors or subcontractors (subbies).

They have no recourse to legal remedies surrounding termination but have some rights to ‘general protections’ provisions in the Fair Work Act. The contract has no provisions for paid leave or other statutory entitlements that an employer/employee relationship includes. Having or obtaining an ABN does not automatically mean that a person will be classed as an independent contractor.

For more details check out our fact sheet


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