When considering a new job, there is more for people to think about than how much it pays, the location, or the hours of work. It is also important to understand the difference between being an employee or contractor.
If someone in your community is working as an apprentice, labourer or trainee, they will always be an employee for tax and super purposes. As an employee, they are working as part of another person's business. They should have a tax file number (TFN), give their employer a TFN declaration and might need to choose a super fund.
However if they are working as a contractor, they are self-employed and running their own business, providing a service to clients. This means they have the same responsibilities as any other business, including:
registering for an Australian business number (ABN)
managing their own tax obligations and super contributions
Contractors need to know what their tax obligations are from the start, to save them time, money and help them avoid stress later on.
If someone you know finds themselves in a situation where their job has changed or they are not sure what their working arrangement is, they should talk to the business first. They may also find it helpful to get legal advice.
To help people better understand their working arrangements and the differences between being an employee or contractor, the ATO has developed a suite of in-language fact sheets in Arabic, Chinese, Korean or Vietnamese. Information is also available in English at ato.gov.au/working.