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Contractor or Employee? Find out here
By: Sky Accountants
Complexity coupled with an increased compliance focus from the ATO and others, mean that businesses need to be across the issues to avoid unexpected liabilities.
The purpose of this blog is to provide an overview of the issues that businesses need to be across.
Pay As You Go Withholding and Superannuation Guarantee
Employers are required to withhold tax from wages paid to employees and to make superannuation (https://www.skyaccountants.com.au/)
Failure to meet these obligations can result in significant tax obligations accompanied by penalties and interest.
In both the Pay As You Go (PAYG) and Superannuation Guarantee (https://www.skyaccountants.com.au/)
Calling a person a contractor does not make them a contractor.
Furthermore, the SG legislation extends the definition of an employee to include a person who enters a contract wholly or principally for their labour. This captures arrangements where:
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The ATO sets out its views as to when a contractor will be regarded as an employee in TR 2005/16 (http://law.ato.gov.au/
The following are the relevant factors for consideration:
The fact that most contractors will have an Australian Business Number (ABN) has no bearing on the determination of the person's status as employee versus contractor.
Where a contractor operates through a structure (https://www.skyaccountants.com.au/)
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