Managing employees and contractors

If you're hiring workers or staff, it's important to understand the difference between employees and contractors, as you have different responsibilities depending on the status of the worker. These responsibilities relate to:

• workers' compensation
• superannuation
• payment and payroll tax
• insurance
• hours of work
• tools and equipment
• leave.

The Australian Taxation Office (ATO) checks how businesses engage their workers, and you will face penalties and charges if you incorrectly treat an employee as a contractor. The taxation, super, and other government obligations differ considerably for contractors and employees.

The Fair Work Ombudsman provides all the information you need to identify whether someone is an employee or a contractor.