What is a sole contractor?

A sole contractor is someone who provides services and is considered to be self-employed or a sole trader. They will have an ABN (Australian Business Number) and can also be referred to as a subcontractor.

Some industries that involve contractual services can include construction, IT and creative industries (arts, media).

Considerations to being a sole contractor?

There are a few considerations involved:

  • They will need to pay their own tax in most circumstances.
  • Most contractors will make their own contributions to their super fund.
  • They are in control of their own business insurance.
  • When contract of work issues occur, they will need to be resolved between respective parties involved.

Becoming a sole contractor

To establish yourself as a sole contractor, the following areas should be thought and checked against:

  1. You will need an ABN and some even register a business name too.
  2. Do you fully understand your tax rights and liabilities.
  3. If certain laws apply to your industry you will partake in them, understand how they affect you.
  4. Protect your intellectual property (IP), your business is your identity.
  5. Make sure you have insurance.
  6. Seek professional advice if necessary before starting any business.

Running a business is a very involved process and time consuming. And being a sole contractor is no different but the benefits far out-way the work involved. The best part is you’re running your own business.

A great place to start to find out more information, is over at the business.vic.gov.au website.