Run the ATO multi-factor classification test, then compare the true loaded cost of the same worker as an employee versus an independent contractor, super, leave, workers comp, payroll tax and admin, both ways.
Takes ~3 minutes · FY2026 rates · Figures stay in your browser until you choose to share them
Classification
ATO multi-factor test
True Cost
Both ways, fully loaded
Compliance
Super, TPAR, payroll tax
The Verdict
Which is cheaper, and why
Deciding whether to bring someone on as an employee or engage them as an independent contractor is one of the more consequential calls an Australian small-business owner makes — and it's easy to get wrong. A contractor's hourly rate often looks dearer at first glance, but an employee carries a stack of on-costs (super, leave, workers compensation, payroll tax, admin) that don't show up in the headline salary. At the same time, calling someone a contractor when the relationship really looks like employment is unlawful "sham contracting" under the Fair Work Act, regardless of what the paperwork says. This tool tackles both halves of that decision in one pass: is the arrangement genuinely one or the other, and which is actually cheaper once every cost is loaded in.
The tool does two things side by side. First, it runs the ATO and Fair Work multi-factor classification test as a series of practical questions — who controls how, when and where the work is done; whether the worker can delegate; who supplies the major tools; who carries the commercial risk; whether pay is per hour or per result; and whether the person runs a genuine business with multiple clients. It weighs your answers and gives a directional read (leaning employee, leaning contractor, or borderline), reflecting that no single factor decides it and the whole relationship is looked at together. Second, it builds a true, fully loaded annual cost for the same role both ways, using your inputs (salary or equivalent, state, industry, contractor rate and hours) applied against current statutory figures — the Superannuation Guarantee rate, state-specific payroll-tax settings, indicative workers-comp rates by industry, annual and personal leave, leave loading, public holidays, long service leave accrual, GST and admin. It then shows which option is cheaper per year and per month, an effective loaded hourly rate for each, and the assumptions behind the estimate. It's a planning estimate, not a quote or a legal determination.
Australian small-business owners and managers weighing whether to hire an employee or engage a contractor for a role, who want both the compliance classification and the real all-in cost before they commit.
The short answers are here. For anything else, ask below or get in touch.
No. An ABN and an invoice don't settle it — the ATO and Fair Work look at the substance of the relationship, not the label. They weigh factors like who controls how and when the work is done, whether the person can delegate or subcontract, who supplies the tools, who carries the commercial risk, how the person is paid, and whether they genuinely run their own business serving multiple clients. If those indicators point to employment, the person can legally be an employee no matter what the contract says. The tool's classification step walks you through exactly these factors so you can see which way the relationship actually leans.
These tools work together to give you a clearer picture of your business.
Use these results to make better decisions. If you'd like a second pair of eyes on them, an advisor can walk through what they mean for the business.
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