From the Institute of Chartered Accountants

Last year we presented an article outlining the concept of Contractors being ‘deemed employees’ for the purposes of Superannuation Liability. In essence the Superannuation Guarantee Act 1992 defines a person as an employee if they are an employee under Common Law.

The meaning of ‘employees’ is, however, expanded if the contract is wholly or principally for ‘labour’ In that case the person is ‘deemed an employee’.

The Australian Taxation Office had been involved in a number of cases arguing those deemed ‘employees and those deemed ‘contractors’.

The case of Roy Morgan Research Pty Ltd v Commissioner of Taxation & Anor went before the full Federal Court to make a determination. In that case, the full Federal Court decided that certain individuals engaged by the taxpayer were in fact employees for the purposes of the Superannuation Guarantee Act 1992 (Cwlth).

This reinforces the need for companies to reconsider their position where they have engaged contractors.

Talk to your Chartered Accounting for further information regarding this matter.