Worker or Contractor Tool
Your first step as an employer or principal contractor is to determine if a person performing work for you is either a 'worker', a 'deemed worker' or a 'contractor', for the purpose of workers compensation insurance premiums.
Introduction
The tool assists you to navigate the workers compensation legislation by assessing your employment arrangements through a series of questions and answers to provide guidance about whether a person you have engaged is a worker, a deemed worker or a contractor.
This self-assessment is for employers or principal contractors in any one of the following business structures:
- sole traders
- partnerships
- incorporated entities (such as proprietary limited companies), and
- incorporated trustees.
This tool can also assist sub-contractors who have persons performing work for them as they may be employers.
When completing this assessment, you may find it useful to have any relevant employment/engagement agreements or contracts with you, so you can refer to those documents.
Given that the guidance produced by tool depends on the information you submit, SIRA recommends that you apply your own skill and care when using the tool. When determining whether a person is a worker, deemed worker or contractor, SIRA recommends that you seek professional legal and/or accounting/financial advice in relation to your specific situation.
Worker or 'deemed' worker
If the person performing work is a ‘worker’ or ‘deemed worker’, then as the employer, you have to include their wages in your wages declaration that you provide to your workers compensation insurer, for calculation of premiums for workers compensation insurance purposes.
In accordance with Section 155 of the Workers Compensation Act 1987, you are required to obtain and maintain workers compensation insurance with a workers compensation insurer in respect of your worker or deemed worker and any other workers or deemed workers you employ.
Contractor
If the person performing work is a ‘contractor’ for the purpose of workers compensation insurance premiums then you, as the principal contractor, do not have to include that person’s wages in your wages declaration, subject to the Section 175B (2) exception in the "Note regarding sub-contractors and persons performing work for sub-contractors" below.
It is recommended that contractors hold a sickness and accident/injury and/or income protection insurance policy.
Note regarding contractors
Simply calling someone a ‘contractor’, a ‘subcontractor’ or an 'independent contractor’ in a contract, or if the person performing work has an Australian Business Number (ABN), then this does not make the person a contractor for the purposes of workers compensation insurance premiums.
A person may be a contractor for tax purposes and yet may be a deemed worker (that is, not be a contractor) for workers compensation insurance premium purposes (because different legislation and legal tests apply).
Note regarding sub-contractors and persons performing work for sub-contractors
As per Section 175B (2) of the Workers Compensation Act 1987, a principal contractor is liable for the payment of any workers compensation insurance premiums payable by its sub-contractor. However, the principal contractor’s liability will not arise if they receive a written statement from the sub-contractor. That statement must say the sub-contractor has covered its workers and deemed workers with workers compensation insurance, for the period of the contract. Your subcontractor may use this form.
No personal information is taken when interacting with the tool and your responses will not be saved by SIRA. However, you may print or email a copy of the results for your records.