6 Must Know’s for Independent Contractors and Companies

Did you know that to be an Independent Contractor (IC) who is largely providing service only is liable to be classified as an employee unless they can pass the Personal Service Income (PSI) test? 
Watch this space for information on PSI 

In Australia as an IC you need to be compliant under 7 sections of Legislation. 
Basically as an IC you: 

1. Must be paid on the basis of achieving a result. That is you cannot be paid an hourly, daily rate etc. 

2. Must be able to sub contract the job you have been given by the company to others 

3. Must supply your own equipment eg computer, phone, vehicle etc. 

4. Are responsible for fixing defective, incorrect work at your own cost (Commercial risk). 

5. Have total control over the job allocated as to how the job is carried out and within an agreed time frame. (Can make a profit or Loss). 

6. Must work for more than 1 company for at less than 80% of your time in any 1 year. 
This is certainly not the limit of the requirements but it will give you an inkling of what you need to do to be legally compliant as an IC or engaging company. 

It’s just a minefield…….. 
Did you know that there is an alternative method of engagement that has been around since the 70’s. It’s called, “Common Law Contractor Engagement” and takes away the IR restrictions and gets you out of the sights of the ATO and Fair Work obligations. 
It is legal, robust and has been tested in the courts.