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

Pro tip: get professional accounting advice

T 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

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.

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

TurtleHunter said..

T 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

This is straight off the ATO website

When a business doesn't quote its ABN
If a business supplies you with goods or services it should quote its ABN. If it does not you must generally withhold 49% from the payment you make to them and send the withheld amount to us.
https://www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/When-a-business-doesn-t-quote-its-ABN/

Thanks for the links, I'll get in touch with an accountant and sort it out.