PPM Tax & Legal has developed a contractor toolkit, which can be used by a tax team, project managers, site managers, HR department and others to identify whether they are engaging a genuine independent ‘contractor’ or an ‘employee’ for payroll tax, WorkCover, superannuation, FBT and PAYG withholding purposes.
The toolkit consists of four components:
- Control Document – The control document summaries the relevant law, its application and how to use the questionnaires and flow-charts effectively.
- Contractor Questionnaire – The contractor questionnaire is a one page customised document used to obtain the necessary information from each of the ‘contractors’.
- Scorecard Questionnaire – The scorecard questionnaire is a two page customised document used to analyse whether a person is a contractor or employee for payroll tax, WorkCover, PAYG withholding, superannuation and FBT purposes. It contains a number of questions which have been weighted based on the relevant legislation and case law. Upon completion, a “independent contractor likelihood percentage” is calculated.
- Flowcharts – After calculating the independent contractor likelihood percentage, the six flow-charts are used to highlight the relevant consequences in respect of the employees, genuine independent contractors and different entity types that may be engaged.