Before you hire a worker you need to check if they will be an employee or contractor. Just because they call themselves a contractor, have an ABN and submit an invoice for their work does not make them contractors in the eyes of the ATO.
A worker could be an employee even though you only use them for:
If you wrongly treat your employees as contractors it will affect your tax, super and other obligations as well as put your business at risk of penalties.
The ATO has a Employee/Contractor decision tool to work out if your worker is an employee or contractor for tax and super purposes. The tool does not consider other obligations – for example, payroll tax or Work Cover obligations.
If you’re still unsure about your circumstances you should seek independent advice or request a private ruling from the ATO.
For record keeping purposes please keep a copy of the result provided by the tool.