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Bookkeeping – Payroll – Employee or Contractor? Be careful and know what the ATO says!
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Published on Thursday, 05 November 2015 16:33
As your business is getting busier, you look for more staff to help. Not always easy to find good staff, but the most important question is - should they be an employee or contractor? You need to get it right, be careful and know what the ATO says, because penalties and back payments and interest can apply if the relationship is wrong. You are obliged to know the difference, so beware and learn the difference! The main section starts HERE
The ATO site says –
When to check if workers are employees or contractors
When engaging a new worker, you should check if they're an employee or contractor before entering into any agreement or contract. If you've previously engaged a worker without checking our information about whether the arrangement is employment or contracting, you should review your earlier decision now to make sure you got it right.
How to determine if workers are employees or contractors
To correctly determine whether a worker is an employee or contractor, you need to look at the whole working arrangement. A worker isn't automatically a contractor just because they have an ABN or specialist skills or you only need them during busy periods. Our Employee/contractor decision tool makes it easy to get the right answer.
Records you need to keep
Your business will need to keep records to support your decision on whether your worker is an employee or contractor and the factors you relied on.
Your obligations
Your tax, super and other government obligations will vary depending on whether your worker is an employee or contractor.
If employees are incorrectly treated as contractors
We check how businesses engage their workers. You face penalties and charges if you incorrectly treat an employee as a contractor and don't meet your obligations. You can report a business incorrectly treating employees as contractors to us.
What are your experiences of employing staff? Do you always determine if you will employ or contract? Write about it below!
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For more business tips, see www.accountkeepingplus.com.au
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