We often get asked by workers and potential employers whether a casual worker is able to work on an Australian Business Number (ABN).
It is against the law for an employer to incorrectly treat their employees as contractors.
This is what the government says about ABN entitlement:
You’re not entitled to an ABN for work that you carry out as an employee – including as an apprentice, trade assistant or labourer – even if you or your employer calls it contracting. An employer shouldn’t ask you to get an ABN as a condition of employment. abr.gov.au
- If you work for a labour hire company that pays you directly, then you cannot work under an ABN as you are an employee.
- If you have no independence in how you go about your work, you are an employee. Most casual labourers are employees.
Read this summary to check if you can be treated as a contractor or an employee
Simply put, if you are a casual worker and you are asked to work under an ABN, it usually means your employer, manager, or contractor is attempting to reduce their insurance and superannuation liabilities, and therefore reduce their cost of labour.
Think you’ve been engaged incorrectly?
If you feel that you are being engaged as an independent contractor instead of an employee, or that your contracting agreement is a sham, you can see the next steps at Fairwork Australia.
Finally, if you can’t reach an agreement, and you are still concerned you are being illegally engaged as an independent contractor, you can call Fairwork Australia directly.
Please note, at Dragon, all Dragon Workers are employees. You cannot work on an ABN for Dragon as it is illegal. This also means you are entitled to Workers’ compensation in case of an accident on site and you are covered by our professional liability insurance. We also pay you the super you are entitled to.
If you are determined to work on an ABN, and if you are legally allowed to, here is a quick summary of the benefits and drawbacks:
- You’re usually responsible for organising your own income protection insurance
- You may also need to look at liability insurance and asset and revenue insurance
- If your annual turn over is $75,000, you will need to apply for GST
- You may need to be responsible for licences or other qualifications
- You may still be entitled to super from your employer, though they may not understand that, which could lead to misunderstandings
- You may be able to claim a tax deduction for your super contributions
- You have a greater range of tax deductions available to you
- You are able to work for more than one employer at a time
- You have greater responsibility for your own tax filings and obligations
If you are a casual worker who is paid for their labour, and have little or no control over how you do your work or who you can work for, you are unlikely to be eligible for an ABN as you are an employee.
Working on an ABN puts greater responsibilities on you, and you are not entitled to the same protections and benefits as you would as an employee – even a casual one.
Are you currently looking for work, or to get paid more?
90% of Dragon workers earn overtime and they’re paid the highest rates in the industry.