Sham contracting

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In the table below, examine 17 indicators courts and tribunals will look at when determining if a contractor actually is a contractor or an employee.

Indicator Suggestive of employee Suggestive of contractor
1. You have significant capacity to control and direct the manner in which the contracted work is performed. Y  
2. The worker has the right and capacity to perform work for others.   Y
3. The worker has a separate place of work and is able to advertise their services to others.   Y
4. The worker has the right to delegate or subcontract work.   Y
5. The worker is represented to be part of your business e.g. through a uniform or business cards. Y  
6. You remunerate the worker with a regular wage-type payment based on time served. Y  
7. You remunerate the worker based on and subject to completion of results.   Y
8. You can suspend or dismiss the worker. Y  
9. The worker pays their own expenses associated with work.   Y
10. The worker has an Australian Business Number (ABN) and (if applicable) is registered for GST.   Y
11. You deduct PAYG tax in relation to the worker. Y  
12. You dictate the rate you pay the worker for services. Y  
13. The fee paid to the worker for services is negotiated   Y
14. The worker can increase the profit or net return on remuneration by changing the way services are provided to you.   Y
15. The worker is paid during leave from work. Y  
16. The worker uses their own tools or equipment when providing services.   Y
17. The goodwill created by the worker’s activity is the worker’s goodwill, not the goodwill of your business.   Y

It is important to remember that no single indicator will clearly determine a worker’s status. Employers (and employees) can attempt to arrange their taxes to unlawfully claim a contractor relationship.