Hi, ....been offered a job as a contracted courier not employee. I have to get an ABN but not sure about things like super, holidays and the taxes. I’d like to get some advice on all the questions I should be asking the business?
You should be aware of issues like ones set out in this article- https://www.fairwork.gov.au/about-us/news-and-media-releases/2017-media-releases/november-2017/20171114-z-transport-boxbay-penalty The Fair Work Ombudsman investigated the companies after a bicycle courier, aged in his late 20s, lodged a complaint.
Fair Work Inspectors found that the courier was treated as a contractor, despite Z Transport and Boxbay being aware that his correct classification was as an employee.
The courier was paid a low contract rate based on the jobs he performed - but as an employee, he was entitled to receive employee entitlements under the Road Transport and Distribution Award, including minimum wages and leave entitlements.
This resulted in the courier being underpaid $7641 between February and November, 2013.
The Fair Work Ombudsman subsequently commenced legal action and Boxbay admitted in Court that it contravened sham contracting laws when it engaged the courier as a contractor to perform duties for Z Transport. Z Transport admitted being involved in that contravention.
This mate could be squeaky clean, OR it could just as easily be a shit deal for you!!!
your "employer" is looking to pay you as a subbie instead of an employee. This means you WONT BE COVERED for:
- workers comp
- annual leave
- sick leave
- long service leave
this has long been a tactic to reduce the red tape associated with being an employer. I get the gripe from the employer's end, there is a BUCKETLOAD of paperwork and extra expense associated with this and it adds considerably to the cost of employing staff, so lots of employers have gone down the "subcontractor" road to minimise their costs.
So now that I have painted the employer as an evil b#stard, here is what this COULD be:
if you are a subcontractor, and the job is legit and is APPROPRIATELY PRICED then it can work well for everyone:
so if what you are being paid takes into account things like income tax, super, workers comp, annual leave, sick leave, etc etc etc, then being a subbie can be great.
Get yourself in front of a CA or CPA with experience in these arrangements and go through the terms of the contract.....it will not be cheap, but it can save you thousands if you get the right advice and get things set up for yourself properly from day 1. Make sure that the accountant explains the definition of a DEEMED WORKER to you so that you will have a better idea of what sorts of arrangements are likely to be viewed as "employment dressed up as a subbie" and what arrangements are genuine subcontractor arrangements
so you are on the money in that you need to ask about tax, super, insurance, etc etc etc. You also need to make sure the way your business is structured is best suited to YOU and your needs.
Agree with the above.
The main aim for businesses not having the employees, along with the red tape, is the flexibility (similar to casual employees) of not paying you unless you work. They may also want you to supply your own vehicle (takes the risk of owning the asset away from them). Oddly enough, these are weighted in the businesses favour.
For you - your rate should cover for a general wage paid in about 44 to 46 weeks of work (allows for the loss of public holidays, annual leave, sick leave and the longer term LSL). They will not withhold tax unless asked (they still might not) so it is your obligation. You should also receive the extra 9.5% super, which you are not obliged to put away, although highly recommended.
If you have to supply your own vehicle, check the numbers to make sure this is in your favour. You may need your accountants assistance, but from experience I'd suggest pushing to receive enough in vehicle rate to cover the cost of buying the vehicle(including finance costs) within three years, plus a rate for the ongoing costs. It isn't hard to get lost in the numbers and find that the running costs and financing costs only leave you a relatively small income at the end of the day, to which you need to take out income tax as well.
Don't forget to identify GST as well, and keep on top of this. Too easy to see that money come in and not have it put aside for BAS time.
Plenty to consider before jumping in head-first.