Employee vs. Independent Contractor


There have evolved a number of tests to determine the status of an employee/contractor over the years. The distinction is important because of the obligations imposed on an employer by is different.

There are a number of factors to consider in determining whether a worker is an employee or an independent contractor. A payer must examine all the facts in each case, including the terms of their contract with the worker showing the intent of both parties.


In general, a worker is an employee if they meet the following requirements:

    • are paid for time worked; 
    • receive paid leave (such as sick or annual leave); 
    • are not responsible for providing the materials or equipment required to do their job; 
    • must perform the duties of their position; 
    • agree to provide their personal services; 
    • work hours set by an agreement or award; 
    • are recognised as part and parcel of the payer’s business, and 
    • take no commercial risks and cannot make a profit or loss from the work performed.

Independent Contractor

An independent contractor is an entity (such as an individual, partnership, trust or company) that agrees to produce a designated result for an agreed price. In most cases, an independent contractor:

    • is paid for results achieved; 
    • provides all or most of the necessary materials and equipment to complete the work; 
    • is free to delegate work to other entities; 
    • be free in the way the work is done; 
    • is free to accept or refuse work; 
    • provides services to the general public and other businesses; and 
    • is in a position to make profit or loss.

If you have questions, please feel free to contact us.


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