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Introduction

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.

Contractor decision tool

Not sure if you are, or your worker is, a contractor or an employee? Contractors and employees have different rights and obligations, so it is important to work this out. Whether you are a worker or someone who pays a worker, the contractor decision tool can help you understand what your working relationship is. How the tool works The tool asks 16 questions that are based on what the courts consider when deciding whether someone is in: •an employee to employer relationship, or •an independent contractor to hirer (or business to business) relationship Once you have submitted your answers, you will get a report that: •identifies whether each of your answers points more to an independent contractor or an employee relationship •indicates what your relationship might be based on all your answers. You should also know that when we say “payer”, we mean the employer or hirer. Then we say “worker”, we mean the employee or the contractor. What the contractor decision tool does not do The contractor decision tool is a guide only and doesn’t have any legal force or effect. You cannot rely on the tool to decide whether someone is an independent contractor or employee under any particular legislation. You may need special assessments under legislation such as: •taxation •superannuation •workers' compensation •payroll. If you want to work out what your working relationship is under taxation legislation, try the ABN Entitlement Tool on the Australian Taxation Office website. You can use the tool even if you already have an ABN.

Disclaimer

The contractor decision tool is provided for general information only and must not be treated as advice (legal or otherwise). While the contractor decision tool has been developed based on various court and tribunal decisions, it doesn’t reflect the views of the Australian Government, or indicate a commitment to a particular application of law. The contractor decision tool aims to simplify legal principles so they are easier to understand. The information in it may be updated and amended from time to time. We try to regularly review the contractor decision tool, but the information in it may not reflect the most recent court decisions or changes in the law. Errors or omissions can occur. You should independently verify that the information is up-to-date, accurate, complete and relevant for your purposes. Before you take any action or make a decision on the basis of information in the contractor decision tool or report, you should get professional advice specific to your situation.

Privacy

•You don’t need to tell us your identity in order to use our contractor decision tool. •Our contractor decision tool doesn’t collect personal information about people who access our website. •Any other information supplied to us (for example, if you send us an email) is handled by us according to the Privacy Act 1988.

Acknowledgement

Your role

Choose the description that best suits you:

Work conditions

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.
1. Does your payer have the right to tell you how you should perform your work? For example, who decides: •what work you do •when you do that work •how you carry out that work
2. Who decides where you perform most of your work?
3. Who sets your hours of work?
4. Can you refuse work from your payer?

Responsibility for work

Independent Contractors Decision Tool
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5. Who is responsible for commercial risk and any other risks related to your work? For example: •who bears the costs or loss of any poor workmanship? •who is responsible for any injury you may suffer as a result of your work? •who stands to make a profit or loss from your work?
6. Who supplies the tools and equipment you use to perform your work?
7. Do you have a business that is independent of your payer’s business?

Expenses and entitlements

Independent Contractors Decision Tool
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8. Are you entitled to paid leave (such as annual leave and sick leave) from your payer?
9. How are you paid?
10. If you incur expenses while conducting your work, who meets these expenses?
11. How is tax deducted from your pay?

Recruitment and dismissal

Independent Contractors Decision Tool
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12. How did you find your work?
13. Can your payer suspend or dismiss you when they want?
14. Is your contract with your payer task based?
15. Can you subcontract your work to another person?
16. Can you undertake work for more than one payer?

Work conditions

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.
1. Do you have the right to tell your worker how they should perform their work? For example, can you direct: •the work they do •when they do the work •how they carry out the work
2. Who decides where your worker performs most of their work?
3. Who sets your worker’s hours of work?
4. Can your worker refuse work from you?

Responsibility for work

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.
5. Who is responsible for the commercial risk and any other risks related to the work performed by your worker? For example: •who bears the costs or loss of any poor workmanship? •who is responsible for any injury your worker may suffer as a result of their work? •who stands to make a profit or loss from your worker’s work?
6. Who supplies the tools and equipment that your worker uses to perform their work?
7. Is your worker’s business independent of your own business?

Expenses and entitlements

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.
8. Is your worker entitled to paid leave (such as annual leave and sick leave) from you?
9. How is your worker paid?
10. Who pays or reimburses any expenses your worker incurs while conducting their work?
11. How is tax deducted from your worker’s pay?

Recruitment and dismissal

Independent Contractors Decision Tool
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Choose the answer that best describes your situation. Please complete all questions.
12. How did you find your worker?
13. Can you suspend or dismiss your worker when you want?
14. Is your contract with your worker task based?
15. Can your worker subcontract their work to another person?
16. Can your worker undertake work for more than one payer?

Your results

Independent Contractors Decision Tool
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Understanding your results

Employees

Your answers suggest that you are more likely to be an employee. However, your true status can only be decided by a court. Before you take any action based on this result, we suggest that you seek independent advice from a lawyer or another employment law specialist. Make sure you give all the terms of your work agreement to your advisor. Even if your agreement states that you’re an employee or a contractor, a court will decide what your status is based on the whole of the relationship between you and your payer, and not just what is stated in the agreement.

Employers

Your answers suggest that your worker is more likely to be an employee. However, their true status can only be decided by a court. Before you take any action based on this result, we suggest that you seek independent advice from a lawyer or another employment law specialist. Make sure you give all the terms of the work agreement to your advisor. Even if the agreement states that your worker is an employee or a contractor, a court will decide what your worker’s status is based on the whole of the relationship between you and your worker, and not just what is stated in the agreement.

Contractors

Your answers suggest that you are more likely to be a contractor. However, your true status can only be decided by a court. Before you take any action based on this result, we suggest that you seek independent advice from a lawyer or another employment law specialist. Make sure you give all the terms of your work agreement to your advisor. Even if your agreement states that you’re an employee or a contractor, a court will decide what your status is based on the whole of the relationship between you and your payer, and not just what is stated in the agreement.

Hirers

Your answers suggest that your worker is more likely to be a contractor. However, their true status can only be decided by a court. Before you take any action based on this result, we suggest that you seek independent advice from a lawyer or another employment law specialist. Make sure you give all the terms of the work agreement to your advisor. Even if the agreement states that your worker is an employee or a contractor, a court will decide what your worker’s status is based on the whole of the relationship between you and your worker, and not just what is stated in the agreement.

Employee or Contractor

Based on your answers, it’s unclear whether you’re a contractor or an employee. Some of your answers suggest you’re an employee, while others suggest that you’re a contractor. Only a court can decide what type of relationship you are in, so we suggest you seek independent advice from a lawyer or another employment law specialist. When seeking further advice, make sure that your adviser has access to all the terms of the employment/contracting agreement. Even if the agreement states that the worker is in a particular relationship, a court will determine what the relationship truly is based on the whole of the relationship between you and your payer, and not just what is stated within the agreement.

Employer or Hirer

Based on your answers, it’s unclear whether your worker is a contractor or an employee. Some of your answers suggest they’re an employee, while others suggest that they’re a contractor. Only a court can decide what type of relationship you are in, so we suggest you seek independent advice from a lawyer or another employment law specialist. When seeking further advice, make sure that your adviser has access to all the terms of the employment/contracting agreement. Even if the agreement states that the worker is in a particular relationship, a court will determine what the relationship truly is based on the whole of the relationship between you and your payer, and not just what is stated within the agreement.

Conditions

Question
Your answer suggests you are a(n)…
1. Control over work
(show answer)
I decide how I will perform my work.
My payer has the right to tell me how I should perform my work.
My worker decides how they will perform their work
I have the right to tell my worker how to perform their work.
Contractor
Employee
Employer
Hirer
2. Location of work
(show answer)
I choose where I do all or most of my work.
I work at places as directed by my payer.
My worker chooses where they do all or most of their work.
I direct where my worker performs their work.
Employee
Contractor
Hirer
Employer
3. Hours of work
(show answer)
My payer sets my hours of work.
I decide my own hours of work
I set my worker’s hours
My worker decides their own hours of work
Employee
Contractor
Hirer
Employer
4. Right to refuse work
(show answer)
I only need to perform the work that I have agreed to in my contract.
I must perform any work reasonably asked of me within my job description.
My worker only needs to perform the work that they have agreed to in our contract.
My worker must perform any work I reasonably ask of them within their job description.
Employee
Contractor
Hirer
Employer

Responsibilities

Question
Your answer suggests you are a(n)…
5. Liability and risk
(show answer)
My payer is responsible for commercial and other risk related to work.
I am responsible for commercial and other risk related to work.
I am responsible for commercial and other risk related to my worker's work.
My worker is responsible for commercial and other risk related to their work.
Employee
Contractor
Hirer
Employer
6. Equipment
(show answer)
My payer supplies me with tools and equipment for my work, or pays me a tools allowance.
I supply my own tools and equipment for work.
I supply my worker with tools and equipment, or pay them a tool allowance.
My worker supplies their own tools and equipment.
Employee
Contractor
Hirer
Employer
7. Relationship to business
(show answer)
My business is independent of my payer’s business.
I work as part of my payer’s business.
My worker’s business is independent of my business.
My worker works as part of my business.
Employee
Contractor
Hirer
Employer

Entitlements

Question
Your answer suggests you are a(n)…
8. Leave entitlements
(show answer)
I am entitled to paid leave.
I have no leave arrangements with my payer and I'm responsible for my own income if I'm not at work.
My worker is entitled to paid leave.
I have no leave arrangements with my worker and they are responsible for their own income if they're not at work.
Employee
Contractor
Hirer
Employer
9. Payment
(show answer)
I submit invoices and am paid based on the price I quoted to my payer for my services.
I earn a regular salary or wage that comes from my modern award or enterprise agreement, or that I negotiated with my payer.
My worker submits an invoice and I pay them based on the price they quoted for their services.
I pay my worker a regular salary or wage that comes from their modern award or enterprise agreement, or that we negotiated.
Employee
Contractor
Hirer
Employer
10. Expenses
(show answer)
My payer meets the expenses incurred while conducting my work.
I pay for expenses incurred while conducting my work. I may increase my charges to the payer to cover expenses.
I meet the expenses my worker incurs while conducting their work.
My worker pays for expenses incurred while conducting their work. They may increase their charges to me to cover expenses.
Employee
Contractor
Hirer
Employer
11. Taxation
(show answer)
My payer deducts income tax from my pay.
I am responsible for my own tax.
I deduct income tax from my worker's pay.
My worker is responsible for paying their own tax.
Employee
Contractor
Hirer
Employer

Employment

Question
Your answer suggests you are a(n)…
12. Appointment
(show answer)
I found my work by advertising or promoting my services.
I applied for an advertised position.
My worker advertised or promoted their services to me.
I recruited the worker through an advertised position.
Employee
Contractor
Hirer
Employer
13. Termination
(show answer)
I can be suspended or dismissed, subject to state and federal industrial relations laws.
My arrangement with the payer can only be terminated if I do not perform the work I have been contracted to do.
I can suspend or dismiss my worker, subject to state and federal industrial relations laws.
I can suspend or dismiss my worker without reason, as long as it is in accordance with the conditions in our contract.
Employee
Contractor
Hirer
Employer
14. Scheduling of work
(show answer)
I am contracted to work for a length of time (this can be indefinite).
I am contracted to complete a specific task and not guaranteed future work.
My worker is contracted to work for a length of time (this can be indefinite).
My worker is contracted to complete a specific task and is not guaranteed future work.
Employee
Contractor
Hirer
Employer
15. Subcontracting
(show answer)
I can subcontract some or all of my work to another person (unless I specifically agree not to with my payer).
I cannot subcontract my work.
My worker can subcontract some or all of their work to another person (unless we specifically agree not to).
My worker can't subcontract their work.
Employee
Contractor
Hirer
Employer
16. Ability to accept other work
(show answer)
I am free to work for more than one payer.
I am not free to work for others without my payer’s permission.
My worker is free to work for more than one payer.
My worker is not free to work for others without my permission.
Employee
Contractor
Hirer
Employer

More information

Independent Contractors Decision Tool
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Think that something’s not right?

If you’re operating under an independent contracting agreement, but think that your relationship is that of an employer/employee, you can contact the Fair Work Ombudsman for advice and assistance. The Fair Work Ombudsman can provide you with a better service if you give full and accurate answers to the questions that they ask you. The Fair Work Ombudsman is committed to protecting your privacy, and will handle your personal information in accordance with the Privacy Act 1988. You can contact the Fair Work Ombudsman anonymously, but this may limit the service that they are able to provide you.

Tax and super obligations

Independent contractors can be treated as employees under certain legislation, such as tax or super. The Australian Taxation Office has developed its own decision tool to help payers understand whether their workers are employees or contractors for tax and super purposes. For more information contact the Australian Taxation Office.

Assistance for independent contractors

For more information regarding your rights and responsibilities as an independent contractor, contact us by phone, web chat or email. You can also visit our independent contractors topic for more information.

Print your results

Want a copy of the tool and your results? Print a hard copy for your reference.

Start over

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