As mentioned, there are a lot of factors involved. Things to look at include (but not limited to):
- Are you contracting to produce a specific outcome (eg a single project) or are you available to work on anything they want you to? The latter implies employee. - Do you supply your own tools? If not, then implies employee. - Are you (your company) liable/sueable, or are you under the contracting company's insurance? Latter implies employee. - Are you told what to do or how to do it? Latter implies employee These are the ones I can think of off-hand that I keep an eye on to ensure that I am not an employee. I don't worry too much about the 75% test - it is just one of many. Ultimately, I need to be able to show that I am providing a service to the client but independent of them. My company once had a contract that went for 4 years, with very little external income from other sources, but because of the nature of the contract (mainly the points above) I was deemed not to be an employee, and I survived the audit. Speak to your accountant. Cheers Dave On Thu, Apr 29, 2010 at 4:49 PM, David Connors <[email protected]> wrote: > On 29 April 2010 16:37, Michael Ridland <[email protected]> wrote: > >> I've heard from some people that there is tax implications of contracting >> to a single company for more than 75 percent of your income, is there any >> truth to this? >> > > There are a lot of 'tests' the ATO applies for this but in my observation > over the years, many, many employers flout these and seem to get away with > it. I think (IANAL) most of the risk of getting it wrong are on the payer > side in that they can arguably become liable for annual and sick leave, > super and other stuff that was not laid out in the original contract. > > There was a case of a large company that used a lot of contract labour and > the individual contractors had their nose out of joint because the employees > were given share grants that appreciated a lot. The contractors were then > able to go back and argue that they were, for all intents and purposes > employees (even though they were under contract) and get given a whole bunch > of stock in the company after the fact. > > As always, your mileage may vary and if you're asking this question then > you should really be talking to a CPA, who may then refer you to a HR > specialist lawyer. Ask them about the results test. > > David. > > -- > David Connors ([email protected]) > Software Engineer > Codify Pty Ltd - www.codify.com > Phone: +61 (7) 3210 6268 | Facsimile: +61 (7) 3210 6269 | Mobile: +61 417 > 189 363 > V-Card: https://www.codify.com/cards/davidconnors > Address Info: https://www.codify.com/contact > >
