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.