Contractor responsibilities

As a contractor, you’re generally not entitled to paid sick leave if you can’t work due to illness or injury. You may also not be entitled to workers' compensation payments if you have a work-related accident.

This means you’re generally responsible for organising your own income protection insurance. This will help you manage your expenses if you’re unable to work and earn income. Most large insurance companies offer income protection insurance.

If you work in the sharing economy, some companies offer access to free or discount income protection insurance to contractors who use their platform.

Other insurance you may wish to consider includes:

• liability insurance to cover you for damage or injuries you may cause to other people or property while working
• asset and revenue insurance to cover you for the loss, damage or theft of your work-related assets (such as your bicycle or car) or revenue.

Contractors are generally responsible for any licence or other qualifications needed to perform certain work. For example, if you want to do electrical work in Australia you must hold the correct licence.

Superannuation (super) is a proportion of wages paid into a superfund to save for retirement. Employers are generally required to pay super to their employees.

If you’re a contractor paid wholly or principally for your labour, you’re considered an employee for super purposes. This means your employer will need to pay you super under the same rules as employees.

Tax file number (TFN)

A TFN is a unique number issued by the ATO and used to administer tax. If you're operating as a sole trader you must use your individual TFN. If you're part of a partnership or a registered company you need to apply for a separate TFN.

Australian business number (ABN)

As a contractor, if you don't have an ABN before doing work, your hirer may legally withhold the top rate of tax, plus the Medicare levy, from your payment. Labour hire workers aren’t entitled to an ABN, so you need to check if you’re entitled before applying.

You must register for an ABN for certain activities, such as:

• taxi driving
• providing ridesharing services through the sharing economy (such as Uber, Didi, Ola).

Goods and services tax (GST)

If you’re registered for GST, the services you provide are subject to GST. You need to register for GST if:

• your business has a GST turnover of $75,000 or more
• your non-profit organisation has a GST turnover of $150,000 or more
• you provide taxi travel (including ridesharing services) regardless of your GST turnover
• you want to claim fuel tax credits for your business.

Sharing economy

The sharing economy is where customers connect to workers through a digital platform (such as a website or an app). Customers request services on the digital platform and workers can choose to provide the service for a fee. Examples of sharing economy businesses include Uber, Airtasker and Deliveroo.

If you work in the sharing economy as a contractor, you need to consider how income tax and goods and services tax (GST) applies to your earnings.