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The employer/employee relationship - Adviser’s perspective


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.

Author profile

Steven Batrouney ATI
Steve is an Account Director with Deloitte in Melbourne. Steve has many years of experience in advising clients in relation to a number of employment taxes including payroll tax, fringe benefits tax, pay-as-you-go withholding, superannuation guarantee, salary packaging and WorkCover. - Current at 26 May 2011
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