There is a lot of confusion around what classifies a subcontractor and who should be paid as an employee on the books. Recently, this particular question came up with a client. So here are the rules:

1. Always employees: trainees, apprentices, labourers, trade assistants

2. Always contractors: companies, trusts and partnerships

Sole traders and individuals are where the “grey area” materialises..

Here are the guidelines from the ATO’s website (which is also found on the Office of Fair Trading’s website)

Are you more visual? Here is a short video from the ATO that breaks it down too:

Got a particular worker you are unsure about? Try this Decision Tool to help you make a call.

Have more questions on this or other Payroll issues in your business? We can help you demystify the confusion world of Payroll and managing staff with a number of integrated tools, systems and procedures to make light work of paying your staff! Contact us here to start the conversation!