As a basic definition, independent contractors run their own business, and hire out their time to businesses and other organisations as a service.
If you are classified as an independent contractor, your entitlements and obligations differ from an employee in many ways. You own your own business and generally you will be able to negotiate your own fees and working arrangements. Unlike most employees, you can choose to provide your services to a wide range of hirers. Many independent contractors can also work for a single hirer, sometimes through an agency.
Having an Australian Business Number (ABN) does not automatically make you an independent contractor. The individual circumstances of the working relationship are important in determining whether you are an independent contractor or employee.
Even if you are an independent contractor, certain state and federal legislation may still class you as an employee. This includes superannuation, occupational health and safety, workers compensation, payroll tax among other federal, state and territory laws.
Tools & resources
- The online Contractor decision tool
This tool is for independent contractors, employees, employers and hirers. It will help you understand whether a person is likely to be an independent contractor or an employee at common law. It takes just a few minutes to complete the tool and you will receive a report at the end.
For further information on the different aspects of being an independent contractor, see our topics below:
