A lot of questions start, “So, if a PAYG Contractor…” and then run on as though everybody was quite certain of what that was.

Contractor is a generic term, the boundaries of which are imprecise. It frequently refers to a person who performs work on contract, rather than in ongoing service or by ongoing office. In the case of a contractor, the contract and the work are largely coterminous  – i.e. their boundaries are closely aligned.

Contractors may be dependent (a colourful description) or independent (a legal term of art). They may also be employees. Not every contractor is an independent contractor.

Independent describes the status or autonomy of the contractor.

PAYG describes only the Australian tax system that is applied to the contractor.

PAYG Contractor is therefore not a precisely defined or distinct species of worker, though employment services industry participants often use the expression as though it were – and build business models around that misconception.

If you have a question that starts off, “So, if a PAYG Contractor…” try to work out what the work relationship really is. In most cases once you have done that, the answer will come to you pretty quickly – though you might not always like it!

Andrew  C Wood

10 September 2015