What is an independent contractor?
An independent contractor runs their own business and provides services to a client, rather than being employed — assessed by the whole of the relationship.
An independent contractor is a person who runs their own business and provides services to a client under a contract for services. Unlike an employee, a contractor typically controls how they do their work, can delegate or subcontract, supplies their own tools, bears commercial risk, and invoices for the work rather than receiving wages.
Since the 2024 reforms, the new section 15AA of the Fair Work Act 2009 requires the difference between an employee and an independent contractor to be worked out by looking at the real substance and totality of the relationship — a whole-of-relationship, multi-factor test — not just the words of the contract. Getting it wrong can lead to misclassification and sham contracting claims.
Key facts
- •A contractor runs their own business under a contract for services, not a contract of employment
- •Since the 2024 reforms, section 15AA requires a whole-of-relationship, multi-factor assessment
- •Relevant factors include control, ability to delegate, who supplies tools, commercial risk, and how payment is made
- •Contractors generally arrange their own tax, GST, and insurance, but may still be owed super in some cases
- •Genuine contractors are not covered by most National Employment Standards or unfair dismissal laws
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Contractor or Employee CheckFrequently asked questions
Does having an ABN make me a contractor?
No. An ABN alone does not determine your status. Since the 2024 reforms, the whole of the working relationship is assessed under section 15AA. You can have an ABN and still be an employee in law if the substance of the relationship is one of employment.
Do I get superannuation as a contractor?
Sometimes. Under the Superannuation Guarantee, a contractor engaged wholly or principally for their labour may be treated as an employee for super purposes, meaning the business must pay super on top of the contract fee.
FairWork Mate is an independent commercial service. We are not affiliated with, endorsed by, or associated with the Fair Work Ombudsman, the Fair Work Commission, or any Australian Government agency. Content is general information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.