CONTRACTORS
VERSUS
By Fitness Australia
EMPLOYEES
F
itness Australia helps
you decipher the
differences and
benefits of using contractors
versus employees in your
business.
Let’s define the difference.
There are lots of benefits for a business
to engage independent contractors
to perform certain work, as opposed
to hiring an employee. However, the
two types of engagement are very
different, and should not be considered
interchangeable.
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Defining independent
contractors and employees.
Determining whether a worker is
an independent contractor or an
employee.
Employee: An employee is someone
employed by an employer to perform
a role within the employer’s business or
operation. Employers pay and provide
a range of entitlements to employees
in addition to their wage as required by
law.
Contractor: In contrast, contractors are
effectively self-employed. They generally
have their own business and operate
under their own ABN. Contractors
don’t have the same entitlements as
employees like paid leave, and they are
responsible for paying their own tax and
superannuation.
Whether a worker is an independent
contractor or an employee will not
solely be determined by what has been
agreed between the two parties. This
means, even if there is a contract stating
a worker is an independent contractor,
they may actually be an employee due
to the nature and conditions of their
work with the business.
The following factors should be
considered when trying to determine
whether someone is, in fact, an
independent contractor or an
employee:
WHAT’S NEW IN FITNESS - SUMMER 2015