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socialmediamarketers.com.au

Guide 1 of 5 · The fork itself

Employee or contractor: which one your marketer is

Whether a social media marketer is an employee or a contractor turns on the real arrangement, not the word in the contract, the ABN or the invoices. The ATO and the Fair Work Ombudsman each set out how to work it out, and for work done since 26 August 2024 at a constitutionally covered business, such as most Pty Ltd companies, their tests weigh different evidence.

General information, not legal, tax or employment advice, and not a ruling on any one marketer. The official places to check are the Fair Work Ombudsman for workplace rights and the ATO for tax and super.

Four things that don’t decide it

business.gov.au answers a list of common beliefs about contractors. Four come up whenever a marketer is hired:

  • The ABN. Having one “is not the deciding factor” of whether someone is a contractor.
  • The invoice. Sending one doesn’t make a person a contractor either.
  • The short engagement. Work lasting only hours or days is not automatically contract work.
  • The industry habit. Contract work being common in an industry doesn’t mean a given worker is a contractor.

The label goes the same way. The ATO says any label the two parties use in the contract to describe the relationship “will not determine or be relevant to how your relationship is characterised.”

Two tests, for two purposes

For tax and super: the ATO

The question is whether the worker is serving in your business, and the ATO answers it from the contract: the legal rights and obligations the two sides agreed, whether written, spoken or a mix.

It bases this on two 2022 High Court judgments. Day-to-day practice counts only if, among other things, it is enough to vary the contract.

For workplace law: the Fair Work Ombudsman

From 26 August 2024, constitutionally covered businesses use the whole of relationship test. It looks at the real substance, practical reality and true nature of the relationship, taking in the contract and also how it plays out in practice.

A business with Pty Ltd or Ltd in its name is usually a constitutional corporation, and so covered.

The Fair Work Ombudsman says the older start of relationship test now applies to work done before 26 August 2024, and to state referred businesses, a group that takes in sole traders and partnerships in New South Wales, South Australia, Queensland, Victoria and Tasmania. A contractor earning above the contractor high income threshold, which changes every year, can also opt out of the whole of relationship test.

One marketer, written two ways

An illustration, written for this guide

Arrangement A

Works set days on the business’s laptop and accounts, follows the owner’s content calendar, is paid hourly, and must do the work personally.

Arrangement B

Agrees a fixed fee for a three-month launch campaign, works when and where they choose on their own equipment, may hand parts to a subcontractor, and has other clients.

Against the official factors, they point different ways.

  • Control. In the ATO’s table, an employer has the legal right to control how, where and when the work is done; a contractor chooses those things, subject to reasonable direction.
  • Pay. Pay for time worked leans towards employment; being paid a set fee once a specific result is delivered leans the other way.
  • Delegation. A contract that lets the worker send someone else, as long as the clause is real and can actually be used, points to contracting.
  • Hours and continuity. The Fair Work Ombudsman also weighs hours of work and whether work is expected to keep coming. Its contractor example for hours is a graphic designer who prices a logo by the time it will take and chooses when to do it.

Neither is a ruling. The ATO says “No single indicium is determinative and they should not be applied as if they are a checklist.” The Fair Work Ombudsman adds that a court may sometimes need to decide.

Sham contracting

business.gov.au puts it in two sentences: “A business incorrectly telling an employee they are a contractor is called sham contracting. This is illegal.”

The Fair Work Ombudsman’s version is more exact. Representing to a worker that they are a contractor is unlawful when the business doesn’t reasonably believe it. So is knowingly making a false statement to persuade an employee to become a contractor doing the same or much the same work, and so is dismissing an employee, or threatening to, in order to re-engage them that way. Courts can impose penalties on businesses and on individuals.

On 13 March 2026 the ATO and the Fair Work Ombudsman said they were sharpening their focus on sham contracting. Among the warning signs their joint release says the ATO looks for in its data: contractors who work almost entirely for one business.

When a company does the work

For tax and super, the ATO is clear on one point: “An employee must be a natural person.” Hiring a company, trust or partnership is a contracting relationship, and the people who do the work are not your employees. A marketer supplied through a labour hire firm is different again: the business’s contract is with the firm, and the firm handles tax withholding and super for the worker.

Next: pay for an employed marketer, and super for a contracted one.