You want help on jobs but you're not sure whether to hire an employee or pay someone as a subcontractor. Getting this wrong has serious ATO and Fair Work consequences — beyond just paperwork. None of this requires an MBA — just a few changes you can stick to between jobs.
Why this problem sticks around
You want help on jobs but you're not sure whether to hire an employee or pay someone as a subcontractor.
If you are a tradies owner, you already know the craft. The friction is everything around it: enquiries going cold, quotes sitting in draft, jobs overlapping, and admin eating your evenings. Getting this wrong has serious ATO and Fair Work consequences — beyond just paperwork.
Left unchecked, this costs you booked jobs, slower payments, and the Sunday-night admin sessions nobody signed up for. Fixing it is less about working harder and more about removing friction from the parts customers never see.
What actually works in practice
Subcontractor: runs own business, controls how work done, invoices for jobs, bears commercial risk. Employee: you control hours, tools, direction, pay wages and super. ATO and Fair Work tests determine reality — not what you call the arrangement.
Treat this like a job, not a New Year's resolution. Block 30 minutes weekly to review pipeline, cash, and what slipped through the cracks. Small course corrections beat annual panic.
You do not need to rebuild your entire business this week. Start with the first step below, run it on your next job, and adjust from there.
A practical approach you can start this week
1. Apply ATO employee vs contractor tests honestly
Control, tools, hours, risk, ability to subcontract — score the relationship.
2. Calculate total cost of employment vs subcontractor rate
Employee: wages + super + leave + workers comp. Subbie: higher rate but fewer obligations — if genuinely independent.
3. Document arrangement properly either way
Written employment contract or subcontract agreement with clear scope.
4. Get accountant advice before structuring
Sham contracting penalties are severe — professional advice essential.
Quick tips for busy tradies
- This is general info not legal advice
- Same person cannot be employee Monday and subbie Tuesday
- Subcontractor should have own ABN and insurance
- Payroll tax thresholds apply in WA — know limits
- Review arrangements if relationship changes over time
Common mistakes to avoid
- Calling employees subcontractors to avoid super — illegal
- No written agreement — dispute defaults to employee assumptions
- Deciding based on tax convenience alone
How Automate Leads can help
Automate Leads scheduling coordinates employees and subcontractors on Perth jobs — clear job assignment regardless of employment structure. That is the gap Automate Leads closes — job scheduling for mixed teams without juggling five separate subscriptions.