Classifying a new worker

It is important to determine whether a new worker is classified as an employee or a contractor, as it affects tax, superannuation, and other obligations such as workers compensation insurance, as well as the worker’s entitlements.

Accurately determining the classification of a worker is essential to creating a fair environment for all Australian businesses.

To assist small businesses in making this decision, the Australian Taxation Office (ATO) is creating a Practical Compliance Guideline PCG 2022/D5 called Classifying Workers as Employees or Independent Contractors – ATO Compliance Approach and a Draft Taxation Ruling TR 2022/D3 Income Tax: Pay as You Go Withholding – Who is an Employee. You can find out more and provide your feedback via the ATO website.

Our tax champions are here to assist with any questions you may have with your tax and super matters. Feel free to get in touch on (03) 8393 1000.