Question 1

Is it better to be a contractor or employee?

Accepted Answer

It depends on your rate and expenses. Contractors typically need to earn 30-50% more than the equivalent salary to match an employee's total package, because they miss out on super, leave, sick pay, and must cover their own insurance and accounting costs.

Question 2

Do contractors pay more tax?

Accepted Answer

Not necessarily. Contractors pay the same income tax rates but can deduct legitimate business expenses, reducing their taxable income. However, contractors must fund their own super (12%) and don't receive employer-paid leave entitlements, which reduces the effective benefit.

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