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The ATO has an online tool that can help, and the following table can help decide the status of a worker.

Factor Indicative of an employee Indicative of an independent contractor
Does the worker have control over the way a task is performed? No Yes
Do they supply/maintain their own tools or equipment? No Yes
Do they work standard hours? Yes No
Are they paid according to task completion, rather than receiving wages based on time worked? No Yes
Does the worker incur any loss or receive any profit from the job? No Yes
Do they accept responsibility for any defective or remedial work that was their doing? No Yes
Are they free to work for others at the same time? No Yes
Do they accept that work lasts for the term of each particular task or contract? No Yes
Does the worker have the right to employ or subcontract any aspect of their work to another person? No Yes
Do they have the right to employ an apprentice or trainee in the execution of contracts? No Yes
Does the worker understand the arrangement with you as a contract for services? No Yes
Do you, as employer, deduct tax from the worker’s pay? Yes No
Does the worker provide their own public liability and sickness and accident insurance cover? No Yes
Do they receive paid holidays or sick leave? Yes No
Do they render tax invoices for payment? No Yes
Do they file GST returns? No Yes*

* They may not if turning over less than $75,000.

The following ATO video dispels the myths surrounding contractors versus employees.

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