Published on 01 Feb 12
by "THE TAX SPECIALIST" JOURNAL ARTICLE
The question of whether an individual is an employee or an independent contractor gives rise to many different taxation issues at both federal and state level. These issues impact both the individual and the entity for whom the work is performed. This article addresses important taxation issues, including those relevant to payas-you-go withholding, the superannuation guarantee, payroll tax, fringe benefits tax and WorkCover insurance premiums. Central to these taxes is the nature of the relationship between the parties: whether it is that of employee/employer or contractor/principal.
The article sets out a number of examples and discusses the likely approach of the Australian Taxation Office and a State Revenue Office. The author considers that, in the current changed environment, the revenue authorities’ approach does not sufficiently recognise the responsibility of the individual to
obtain work, to agree to the terms of the provision of the services, and to negotiate an appropriate fee.
Steve is a Principal with Ernst & Young and heads the Employment Taxes Practice in Melbourne. He has a record of servicing clients in relation to a number of employment taxes including pay-roll tax, fringe benefits tax, pay-as-you-go withholding, superannuation and WorkCover.
Current at 8 May 2007 Current at 09 March 2009
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