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Contractor Management

What to take into consideration when being paid as an Independent Contractor

By 14 November 2022No Comments

Since independent contractors are not employees, they don’t have a minimum wage or pay rate. Instead, independent contractors negotiate payment as part of their contract. An independent contractor will submit an invoice when they need to be paid. They can be paid on a regular basis or at the end of the contract or project.

Since independent contractors are running a business, they will need to arrange for tax to be taken out of their pay and pay GST. If an independent contractor does not get payment for an invoice they can go to the Government Website, or seek independent legal advice for help. The Australian Government can’t force payment of unpaid invoices.

As well as paying their own tax, independent contractors may need to make their own superannuation contributions. However, this is dependent on the contract agreement, for more information on whether the superannuation is paid by the contractor or the hirer, visit the Australian Taxation Office Website. Also, independent contractors must be aware of payroll tax laws and what their individual liabilities are for payroll tax. This can come back to bite them years later under a payroll tax audit.

For most contractors, working on their current contract AND doing the administration tasks mentioned above, this can be a big workload for one individual. That’s why Contractor Management Companies like Pendragon exist. Instead of worrying about the administrative hassles, contractors can solely concentrate on their contract role while the invoice payment chasing, tax, GST, super payments, etc. is taken over by the Contractor Management Firm.

For further information please don’t hesitate to contact us, book an appointment or reach us at [email protected] or 02 9407 8700 where one of our Australian team members will gladly help you.

Pendragon Team