Do you have employees and not even realise it?
The current trend in small business is to outsource tasks to people who specialise in areas such as virtual assistance, marketing, social media, bookkeeping, and graphic design.
But did you realize that even though these people call themselves “contractors” – the ATO can still deem them to be employees – and then as their “employer” you now become liable for withholding tax and superannuation. Plus penalties for not paying these obligations during the year. The risks for getting it wrong are simply not worth it. So what is the difference between employees and contractors?
Here are some handy guidelines the ATO uses to determine if someone is an employee or a genuine contractor. Keep in mind that there is no hard and fast rule, but the ATO looks at every case individually. A contractor having their own ABN is of very little relevance when the ATO makes their determination.
What Is The Difference Between Employees And Contractors