If legislative proposals are adopted in their current form, directors could be held personally responsible to the GSC if contributions to the Aging Guarantee are not made on behalf of contractors considered workers for the purposes of the right to over-indebtedness. This will be the case, although contractors generally charge higher fees, as the contractor is responsible for all tax liabilities and insurance premiums. In addition, the fact that a contractor has made contributions that are deductible for ageing will not reduce the liability of the client, even if the contractor is subject to a tax obligation on the amount of contributions. A single contractor who has his own superannuation, who is not paid by the company that does not pay them, and the ATO decides that the superannuation should have been paid by the corporation, the individual contractor will probably lose the tax deductions because they cannot meet the conditions of a tax deduction as a primarily independent person. Overall, the individual contractor can, among other things, claim a tax deduction that is essentially independent for independent supplementary contributions if less than 10% of his or her valuable income, ancillary benefits and the RESC come from employment activities. If the individual contractor cannot deduct his additional contributions because he does not pass this 10% review, the contributions are considered non-concessional contributions for the purpose of spill. This is unlike the contributions granted when the deduction could be used. This re-characterization of contributions may result in the individual contractor violating its non-concessional contribution limit if it has contributed to other contributions to ageing from tax revenues. If this limit is exceeded, the contractor may be required to pay a non-concessional contribution tax of 49%. There are a number of things that can help you see the difference between an employee and a contractor. There is no one who makes the difference on our own — you have to look at everything together.
Independent contractors run their own businesses. They usually negotiate their own fees and work agreements and can work for more than one client at the same time. Independent contractors are often referred to as subcontractors. If your company hires independent contractors who are entitled to overannuation, please contact the Russell Kennedy Workplace Relations, Employment and Safety Team for more advice. Sham Contracting is where a person who works as an employee is told that he is an independent contractor if not. They are also treated in a certain way as an independent contractor, for example. B they can have an ABN and submit invoices. Distinguishing between staff and independent contractors can be a difficult task. The courts have made the distinction using a „multi-factor“ test that examines the relationship between the client and the contractor. However, this is not an exact science, but an exercise in balance in which the various factors are weighed and concluded. If a tax officer or its tax representative is unsure whether payments are made to a contractor or worker, the ATO may request, on behalf of the subject, a binding private decision, i.e.: You can ask the ATO for clarification if the multifactorial test is inconclusive.