Before accepting work described as contracting, clarify the real arrangement and the legal framework used to assess it. Having an ABN, issuing an invoice or signing a document labelled “contractor” does not, by itself, settle whether you are an employee or contractor.
The Fair Work Ombudsman’s start-of-relationship guidance and whole-of-relationship guidance explain different tests and their coverage. The correct approach depends on the business, relevant period and circumstances. Do not apply one checklist as a universal legal verdict.
Establish who is engaging you and for what
Identify the legal entity, work, proposed payment and contract. Ask whether the arrangement is employment or a service business engagement and what facts support that description. Keep the written terms and relevant discussions together.
Consider how the work is organised as well as the label. The questions below help identify facts for official guidance or professional advice; no single answer automatically decides status.
Questions to ask about the proposed arrangement
| Area | Question to clarify |
|---|---|
| Control | Who decides how, when and where the work is done? |
| Personal performance | Must I do the work personally, or is there a genuine right to delegate? |
| Payment | Am I paid for time, a defined result or another basis? |
| Equipment | Who provides and maintains the necessary tools and systems? |
| Commercial risk | Who bears the cost of correcting defective work or other business risk? |
| Continuing work | What commitment or expectation exists beyond the current task? |
| Legal framework | Which employment, tax and superannuation rules need separate assessment? |
Record the actual answer rather than choosing the one that sounds more independent. A contract may raise questions requiring qualified advice, particularly where the proposed work and written terms do not appear to align.
A fictional question to put to the engager
A fictional worker is offered an “ABN role” with set shifts and personal attendance. They ask: “Could you explain the proposed arrangement and provide the contract, including who controls the work, whether delegation is allowed and how payment and risk are allocated?”
The worker does not decide status from set shifts alone. They gather the terms and seek guidance on the applicable test. This example illustrates fact gathering, not a legal finding that the fictional arrangement is employment or contracting.
Check tax and superannuation separately
Do not assume the employment-law answer automatically resolves every tax or superannuation question. ATO guidance on worker differences explains the importance of the legal rights and obligations of an engagement. Specific superannuation rules can extend beyond an ordinary label, so obtain the relevant ATO guidance or professional advice for the facts.
Compare offers with those differences in mind. A contractor amount and employee wage are not directly comparable without considering business costs, entitlements, insurance and risk. Do not use an attractive headline rate as proof that the arrangement is appropriate.
Resolve uncertainty before committing
Ask for unclear terms to be explained in writing and take time to review them. Seek assistance from the relevant workplace authority, union, accountant or legal adviser as appropriate. Do not rely on a generic article to determine a disputed status.
Our contractor opportunities guide addresses business procurement opportunities. Our freelance work guide provides wider context. This article’s task is narrower: checking what you are being asked to agree to before accepting work.
