Even though your worker’s employment contracts can be written, verbal or a mix of the two, it’s a great idea to have a written employment contract.
A written contract can help you set clear expectations, minimise misunderstandings and disputes with your workers.
And it's always easier to refer back to a written document (if you need to) than a verbal conversation that you had with a worker some time ago.
Bonus tip - make sure that all employment contracts have terms that are either the same as any applicable industry award or more favourable.
Also, don't forget, you cannot pay less than the industry minimums.
It's a legal requirement that you give every new employee a fair work information statement. you can download this form from the Fair Work Ombudsman’s website.
Employees and contractors are treated differently for tax purposes. You should get tax advice about your circumstances.
Generally, you need to withhold tax from an employee’s wages but contractors pay their own tax.
There are other types of tax you need to be aware of, including:
You should register for FBT as soon as you decide to start providing fringe benefits to your employees.
The Australian Dept of industry innovation and science is a good starting point for understanding taxes that you need to register for.
Super is money you pay for your workers to provide for their retirement. You pay employees superannuation. Contractors pay their own.
Currently, superannuation is 9.5%.
If you pay an employee $450 or more before tax in a calendar month, you have to pay super on top of their wages.
The minimum you must pay is called the super guarantee (SG):
You can read more about superannuation on the ATO’s website.
Your employees have leave entitlements. Here are some of the key type of leave.
Also, if your worker is part-time, their leave is typically provided on a pro rata basis.
Here's an example of pro rata leave: Suzie works 3 days per week, thats 60% of a full time equivalent (FTE) so she is entitled to 60% x 4 weeks annual leave = 12 days per calendar year.
To find out more, check out the Fair Work Commission's website.
Do you want to learn more about the difference between employees and contractors? read this.