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What's an employee & what's a contractor?

An independent contractor works under a contract for a specific job or length of time. For example, a plumber is hired to fix a leak.

Unlike an employee, an independent contractor generally doesn't work regularly for an employer, and can choose whether or not to do a particular job they're offered.

There are a number of indicators to help tell the difference between an employee and an independent contractor.

Here's some general guidance on the differences between employees and independent contractors.

Note: No single point below makes a person either an employee or independent contractor.

Employees

• Perform work, under the direction and control of their employer, on an ongoing basis.
  
• Generally work standard or set hours.
  
• Bear no financial risk (this is the responsibility of their employer).
• Are entitled to have superannuation contributions paid into a nominated superannuation fund by their employer.
  
• Have income tax deducted by their employer.
  
• Are paid regularly (eg. weekly / fortnightly / monthly).
• Are generally entitled to get paid leave (eg. annual leave, personal / carer's leave, long-service leave) if they are a permanent employee.

Independent contractors

• Decide how to carry out the work and what expertise is needed to do so.
  
• Bear the risk for making a profit or loss on each job.
  
• Pay their own superannuation and tax, including GST.
• Generally have their own insurance.
  
• Are contracted to work for a set period of time (for example, 2 months), or to do a set task.
• Decide what hours to work to complete the job.
  
• Generally submit an invoice for work completed or are paid at the end of the contract or project.
• Do not get paid leave.