Ato crackdown on misclassifying employees as contractors sovereign private 323053447369
Published: 2-Dec-25
ATO crackdown on misclassifying employees as contractors - Sovereign Private
The ATO has warned that businesses face significant penalties if they incorrectly treat employees as independent contractors. This applies not only to typical contractors but also to ABN sole traders engaged through recruitment businesses. Penalties include PAYG withholding fines for not deducting tax, the Super Guarantee Charge (SGC) - which exceeds the superannuation that would have been paid correctly and includes interest and administration fees - and additional SG penalties of up to 200% of the SGC.
Furthermore, “sham contracting” may breach the Fair Work Act 2009, with courts able to impose further penalties on offending businesses or individuals.
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