If you engage contractors to perform work, you may still need to cover them for workers' compensation depending on the nature of their engagement.
A person who works under a 'contract of service' is a worker, even if they have an Australian Business Number (ABN) or are responsible for their own tax.
To determine whether you need to cover a contractor for workers' compensation follow the process below:
- As only an individual can be a worker, use the ABN Lookup tool to determine which of your contractors are registered as an Individual or Sole Trader
- For each of these contractors, use the ATO employee/contractor decision tool to determine a person's status as a contractor or an employee
- For each contractor deemed to be an employee through the ATO decision tool, use our Contractor working sheet to record the necessary details and determine the total amount of contractor payments you need to include in your wages declaration.
Please note: this is the same information you are required to submit to the Australian Tax Office (ATO) each financial year.
ABN Lookup tool
To access and use the ABN Lookup tool:
- read and accept the ABN Lookup tools Agreement on the abr.business.gov.au website
- download and open the ABN Lookup tool Excel file (ensure macros are enabled in Excel)
- delete the sample data in all columns below row 3
- for each contractor you engage, enter their ABN in the first column
- once complete, click the Start Lookup button at the top of the Excel file, and then the Lookup ABN details button in the popup menu. This will supply a number of details for each ABN you have listed.
For each contractor with an Entity type of Individual/Sole Trader, use the ATO employee/contractor decision tool to determine if they need to be covered for workers' compensation.
If a contractor has an Entity type that is not Individual/Sole Trader, they do not need to be covered for workers' compensation.
Ensure you save the ABN Lookup tools Excel file for your records, as you may be required to provide a copy of it to WorkCover Queensland.
ATO employee/contractor decision tool and Contractor working sheet
Use the ATO employee/contractor decision tool to determine an Individual/Sole Trader's status as a contractor or an employee. If the tool determines a person is an employee, then they are a worker and need to be covered for workers' compensation.
For each contractor deemed to be a worker, enter their ABN, name, and the total of all payments made to the worker (ex GST) into our Contractor working sheet. This will determine the total amount of contractor payments you need to include in your wages declaration.
Ensure you save the Contractor working sheet Excel file for your records, as you may be required to provide a copy of it to WorkCover Queensland.
- Last updated
- 24 October 2017
North Queensland Injury Prevention and Return to Work Conference
The conference is back in 2018 with a new line-up of expert speakers addressing the needs of those on the frontline of safety, rehabilitation and return to work. Register now!