A friend has just gotten a job as a casual cleaner at a backpackers and has been asked to create an ABN and to invoice them or not be paid.
They are here on a working holiday visa and have already had other jobs without this being requested. It seems like an unnecessary lot of ongoing admin for what is a low wage job. We are a bit overwhelmed reading the ATO and ABN websites too!
I was hoping some folks here could explain why this may be needed?
I wish I could upvote this a lot more. Now I know why this felt really wrong. Thank you so much for your help!
To make a point, there's no real use of the Super payment anyway for backpackers. They won't be here long enough to retire and if they draw it out on leaving, 65% of it is taxed on an already measly sum. Basically means the employer is throwing away money all to jump a legal hoop.
Agreed - It’s also a common misconception that you don’t need to pay super for contractors. If they earn most of their income from one source then they become entitled to super contributions.
Yes fair work/ tax will have different definitions of contractors.
The first question is, is your friend a casual employee or a contractor?
If the former, then no need for an ABN. If the latter, she will.
Also, with ABN / Invoice, they are liable to pay tax from the income earned rather and it being deducted for you via PAYG.
Sham contracting - used to avoid paying super largely along with removing any rights the "contractor/employee" may have.
https://www.fairwork.gov.au/how-we-will-help/templates-and-g…