Contractors, including independent contractors and subcontractors, run their own business and sell their services to others. Contractors will often use their own processes, tools and methods to complete their work. They may negotiate their own fees and working arrangements, and can work for more than one client at a time.

Contractors do have workplace rights and protections but have different responsibilities relating to insurance, tax and super.

Understanding contracts

If you're a contractor, make sure you understand:

Differences between an employee and a contractor

In general:

  • Independent contractors work for themselves and are their own boss.
  • Employees work in someone else’s business. The employer controls how, where and when they do their work, and pays them a wage.

But you need to consider a range of factors when deciding whether someone is an employee or contractor.

To help you decide:

If you’re still not sure, consider getting independent legal advice.

If you believe your employer is incorrectly treating you as a contractor

Contact the Fair Work Ombudsman – call 13 13 94.

Labour hire workers

A labour hire agency may hire a labour hire worker as either an employee or contractor. The agency is responsible for providing their employees with employment entitlements such as leave.

If you engage a labour hire worker, you'll pay the agency a fee for their services.

5 common employee or contractor myths busted


Hiring someone for a few hours or a couple of days at a time doesn't mean they're automatically a contractor. You can hire both employees and contractors for:

  • casual, temporary, on-call and infrequent work
  • busy periods
  • short jobs, specific tasks and projects.


Having an ABN is not the deciding factor of whether or not someone is a contractor. Many factors of the working arrangement are relevant.


Just because a person submits an invoice, it doesn't necessarily mean they're a contractor. You need to consider multiple factors.


Just because contract arrangements are common in your industry, it doesn't mean that you're a contractor.


If someone is legally an employee, having a written agreement will not:

  • override the employment relationships or make the worker a contractor
  • remove an employer’s tax and super obligations.

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