New ATO guidance on “who is an employee?”

February 12, 2024 | Robyn Bull

The ATO recently issued a ruling which explains when an individual is an ’employee’ of an entity for pay as you go (‘PAYG’) withholding purposes.

A useful approach for establishing whether or not a worker is an employee of an engaging entity is to consider whether the worker is working in the business of the engaging entity, based on the construction of the terms of the relevant contract. Importantly, the fact that a worker may be conducting their own business, including having an ABN, is not determinative.