Question: What is the difference between an employee and a contractor?Answer:
The main difference between an employee and a contractor are their working arrangements and their relationship with the person hiring them.
An employee is hired by a business, works for that business and is a part of that business.
A contractor runs or is their own business, they will have their own Australian Business Number (ABN) and provide services to other businesses.
It is sometimes hard to tell the difference between the two, and in deciding on this, courts often look at the responsibilities held by a person to determine their status of employment. For example, employees are paid a steady salary, hourly rate and/or commission. A contractor on the other hand is paid based on a result achieved such as the completion of a prescribed task.