Victoria Legal Aid

Difference between employees and contractors

It is important to find out which kind of worker you are. Sometimes it is not easy to tell the difference. You may think you are an independent contractor when you are actually an employee.

An employee is hired by an employer to carry out work under an agreed employment contract.

An independent contractor or sub-contractor works for themselves and hires out their services. Independent contractors are not protected in the same way that employees are. They are responsible for paying their own tax, insurance and superannuation out of the money they earn.

When trying to work out whether someone is an employee or a contractor under law, it is the actual situation that is important, not the label of ‘employee’ or ‘contractor’ that is being used.

The Fair Work Ombudsman websiteExternal Link has information to help tell the difference between an employee and an independent contractor.

If you are an independent contractor, the Australian Government’s Business website has information about your rights and a range of support services.

You can also see business and commercial issues.

Disclaimer: The material in this print-out relates to the law as it applies in the state of Victoria. It is intended as a general guide only. Readers should not act on the basis of any material in this print-out without getting legal advice about their own particular situations. Victoria Legal Aid disclaims any liability howsoever caused to any person in respect of any action taken in reliance on the contents of the publication.

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Reviewed 03 March 2022

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