Independent contractor

Independent contractors operate their own business, offering specific services to clients or businesses. Unlike employees, they have more control over how they work, including setting their schedules and payment terms. They're not entitled to employee benefits like paid leave, although contractors paid mainly for their labour can still be entitled to superannuation, and they usually handle their own tax obligations.

How to tell a contractor from an employee

Since 26 August 2024, the Fair Work Act decides whether someone is an employee or a contractor by looking at the real substance, practical reality and true nature of the whole relationship, including how the contract works in practice. A genuine contractor usually runs their own business, controls how the work is done, can delegate it, supplies their own tools and bears the risk of loss. Treating an employee as a contractor can be sham contracting. For example, a "contractor" who works only for you, on set hours and under your supervision is likely to be an employee.

Read our guide to employee versus independent contractor.