Hi,
I've recently moved back to Aus after spending sometime home in Canada. I've been hired as a contractor and I've been asked to get an ABN I'm not too educated on the implications and differences between this and working as an employee. Working as a contractor are there tax differences compared to an employee? Can I claim different items for tax purposes? Pros and cons? Cheers for any advice.
Dan
HUGE differences Dan.
If you are on ABN you are responsible for all your overheads(tools, running costs, insurance,super)
As an employee, you will be paid at a lower salary/hourly rate but be eligible for sick days, holiday pay etc......
What trade are you in?
Dan.
If you haven't got an ABN your employer must withhold 49% tax of your payment and send it to the ATO
Get an ABN it free
Select to expand quoteT 11 said..
If you haven't got an ABN your employer must withhold 49% tax of your payment and send it to the ATO
Get an ABN it free
yep profesional advise would be better. 
I think your thinking of TFN not ABN T11
Cheers Dantren, I'm a Physio. Working part time and I figured it may be helpful getting a rough idea before speaking to an accountant. Most people I ask seem fairly clueless as they're on salary. Again appreciate any advice or knowledge.
Any recommended accountants in WA?
I engage a contractor for drafting services on nearly a full-time position. He simply invoices me based on the projects he is working on. He has registered a business and has an ABN which means that he is responsible for all his own overheads, insurances and taxation responsibilities.
I initially offered him a full-time job as an employee, but he wanted the freedom of working for others and setting his own times and rates, so I suggested that he speak with an accountant to ensure that both of us were doing the right thing.
The best advice is to get professional advice.
Some interesting discussion on this recently here: www.seabreeze.com.au/forums/General-Discussion/Chat/Tax-file-to-abn/
The ATO info page Elroy Jetson posted a link to was quite informative.
Read this Dan. https://www.ato.gov.au/Business/Employee-or-contractor/How-to-determine-if-workers-are-employees-or-contractors/Difference-between-employees-and-contractors/?anchor=P49_4674#P49_4674
There are a few "grey" areas that seem to exist in a few industries.
In SOME situations there are particular systems you can use to make yourself a legitimate contractor if you sit in one of these grey areas (eg supplying own materials, having your own business name and structure, supplying quotes for completing particular jobs etc).
Clarence
