Starting a business checklist | business.gov.au

It’s important to determine if you’re considered a contractor or an employee.

If you have been engaged as a contractor but believe you’re an employee, you may be in a sham contracting arrangement – external site . A sham contracting arrangement is when an employer attempts to disguise an employment relationship as a contractor relationship. They may do this to avoid certain taxes and their responsibility for employee entitlements.

Contractors run their own business, sell a service to others, and can work for more than one client at a time. The taxation and super obligations of a contractor will be different to an employee.

Employees work in someone else’s business, are paid a wage and their work is controlled by an employer.

Read the Fair Work Ombudsman’s independent contracting – external site  page to understand the different entitlements of employees and contractor.