Independent contractor laws have changed.
Helpful link at the end of this report: Building and Construction Industry Contractor Decision Tool (*)
Do you engage subbies?
Do you work for others as a subbie?
The old 80% rule no longer applies.
As you know, it use to be that as long as you never had any more than 80% of your work coming from one source as a subbie, you could call yourself a contractor.
Earlier last year this all changed with the new independent contractor laws.
The ATO is closing the loopholes to protect people who are 'really' employees and not getting the benefits of PAYG Withholding Tax, Award rates of pay, Workers Compensation cover and compulsory Superannuation contributions.
There are 6 factors the Australian Taxation Office now uses to determine Contractor/Employee status:
1. The ability to sub contract/delegate the work to others
2. The basis of payment
3. Who supplies the majority of the tools required to perform the tasks
4. Who takes the commercial risk (if things go wrong)
5. Who determines how a job is to be done and
6. The independance of the worker to accept or reject work
How do you cover yourself under these new independent contractor laws?
Do you provide a written quote for your work? Even the verbal jobs you get from other companies?
Does it cover most of the points above?
If not, you may be missing a key piece of evidence that you are a contractor - and not an employee.
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Get yourself a clear understanding of how a detailed written quote can ensure contractor status
(rather than employee status).
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n.b. If you work for a few companies as a subbie on hourly rates, you may be deemed to be an employee with a few part time casual jobs.
Neither you nor the companies you work for want that.
(*) If you are in the Building and Construction Industry here is a link to the
ATO's Employee/Contractor Decision Tool.
Click the underlined bold blue text
You can remain anonymous.
You can print off a copy as evidence that you comply with these new regulations.
'Have you ever not been paid?' is another popular report people read.
Also people read 'Do you ever get customers who complain?', you might like to check it out while your here.
Oh, while you are browsing, have you considered joining us?
I hope this helps.
Paul Johnson
Missing Piece Marketing
0407 261 900
