A cleaner is an employee or an independent contractor according to the legal rights and obligations in the whole working relationship, not the label used in the contract. The Australian Taxation Office (ATO) explains this approach through the High Court’s 2022 judgments, CFMMEU v Personnel Contracting [2022] HCA 1 and ZG Operations v Jamsek [2022] HCA 2; figures checked 1 October 2026. In the same guidance, wholly or principally domestic work for more than 30 hours per week is one listed circumstance for superannuation treatment of a contractor deemed to be an employee, while an incorrect wider classification can create tax, super and penalty obligations.
Why does getting the classification wrong matter?
Worker classification affects a business’s tax, superannuation and other obligations. The ATO’s employee or independent contractor overview also covers penalties, charges and reporting when an employee is incorrectly treated as a contractor.
The business is responsible for making the correct decision for tax and superannuation purposes. An incorrect decision may lead to penalties, so paying a worker under a contract labelled “independent contractor” does not remove that responsibility.
What does the High Court approach focus on?
The High Court judgments clarify that the totality of the relationship consists of the legal rights and obligations arising from the contract between the parties. The assessment therefore starts with what each party is legally entitled and required to do.
The central distinction is whether the cleaner:
| Worker’s legal role | What that looks like |
|---|---|
| Employee | Works in and as part of the hiring business, performing as its representative |
| Independent contractor | Provides services to the business and performs work to further their own business |
The business should accurately identify its essential activities and compare them with the cleaner’s contractual rights and obligations. For example, ask whether the cleaner is serving as the business’s representative or independently supplying cleaning services to the business.
Although the former multifactorial test is no longer used, the same indicia remain relevant. They must be assessed through the agreed legal rights and obligations, not by mechanically counting workplace features.
Does an independent contractor label or signed contract settle the answer?
No. The ATO says a label such as “independent contractor” neither determines nor is relevant to how the relationship is characterised.
A contract may be:
- Written;
- Wholly oral; or
- A hybrid of written terms, oral terms and terms implied from conduct.
For an individual cleaner, the legal rights and obligations in the working agreement determine whether the worker is an employee or independent contractor for tax and superannuation purposes. A document can describe the relationship as contracting, but its description cannot replace an examination of what it actually gives each party the legal right to do.
When do actual workplace practices matter?
Actual practices do not become relevant merely because they look more like employment than contracting. Under the ATO’s approach, conduct and work practices are irrelevant unless, among other things, they are sufficient to vary the agreed contractual terms.
This distinction matters for a cleaning arrangement. Regular instructions, rosters, equipment use or payment practices may describe what happens on the ground, but the assessment still asks whether those practices legally changed the relationship promised by the parties.
The correct sequence is to identify the agreed legal position first, then consider whether the parties’ conduct varied it. A signed contract does not remove the need to examine the whole relationship.
Which terms should a cleaning business compare?
The following features may point towards one classification or the other, but no single feature determines the result and they should not be treated as a checklist.
| Contractual indicium | Points towards employee status | Points towards independent contractor status |
|---|---|---|
| Control | The business has a legal right to control how, where and when the cleaner works | The cleaner can choose how, where and when to work, subject to reasonable direction |
| Role and integration | The cleaner serves in the business and must act as its representative | The cleaner provides services and performs work to further their own business |
| Remuneration | Payment is for time worked, a price per item or activity, or commission | The cleaner is generally contracted to achieve a specific result, paid on completion, often for a fixed fee |
| Delegation or subcontracting | The cleaner must personally perform the work and cannot appoint someone else | The cleaner has a genuine, legally exercisable right to delegate or subcontract |
| Tools and equipment | The business provides all or most tools and assets, or pays an allowance or reimbursement | The cleaner provides all or most tools and assets without an allowance or reimbursement |
| Commercial risk | The cleaner bears little or no risk, while the business bears costs arising from injury or defects | The cleaner bears the commercial risk of costs arising from injury or defects |
| Goodwill | The hiring business benefits from goodwill generated by the work | The cleaner’s own business benefits from that goodwill |
Payment based on time, ownership of cleaning equipment or the ability to send another cleaner may therefore be relevant, but none is conclusive on its own. Even work involving a substantial item for which the contractor is wholly responsible remains only one contractual indicium.
Does more than 30 hours per week make a cleaner an employee?
No. More than 30 hours per week is a stated circumstance for superannuation treatment, not the general employee-versus-contractor test.
For superannuation purposes, the ATO says super must be paid in certain circumstances where an independent contractor is deemed to be an employee. The listed circumstances include:
- Work under a contract that is wholly or principally for the worker’s labour; and
- Work that is wholly or principally domestic in nature for more than 30 hours per week.
A business engaging a worker it believes is an independent contractor can choose to pay super to avoid liability for the superannuation guarantee charge. That is a superannuation option, not a substitute for correctly classifying the wider working relationship.
What changes if a business or labour-hire firm is involved?
The identity of the party contracted matters for tax and superannuation purposes.
| Engagement structure | Tax and superannuation position described by the ATO |
|---|---|
| An individual cleaner | The individual’s working agreement determines whether they are an employee or contractor |
| A company, trust or partnership | The entity is always treated as a contractor for this purpose; an employee must be a natural person |
| A labour-hire firm | If the hiring business pays the firm for work undertaken in its business, it contracts with the firm rather than the individual worker |
People performing work for a contracted company, trust or partnership may be its directors, partners or employees, but they are not employees of the hiring business.
Where a labour-hire firm is used, the firm is responsible for the worker’s pay as you go (PAYG) withholding, superannuation and fringe benefits tax obligations. Labour-hire firms may also be called on-hire firms, recruitment services or group training organisations.
Are any cleaning-related roles automatically employees?
The ATO lists apprentices, trainees, labourers and trades assistants as workers who are always treated as employees for this purpose. Apprentices and trainees both work and receive recognised training towards a qualification, certificate or diploma, and their arrangements may be full-time, part-time or school-based.
A business hiring an apprentice or trainee must meet the same tax and superannuation obligations it has for other employees. The independent contractor label cannot change that treatment.
What should a business check before relying on the classification?
- Identify the legal party with which the business is contracting.
- Set out the cleaning business’s essential activities.
- Collect the written contract, oral terms and any terms implied from conduct.
- Compare the cleaner’s legal rights and obligations using the indicia above.
- Check whether workplace conduct was sufficient to vary the contractual terms.
- Review the superannuation rules for contracts principally for labour and domestic work exceeding 30 hours per week.
- Reconsider the arrangement if the cleaner is actually serving in the business rather than supplying services to it.
- Check the current ATO regulator page before relying on the classification.
- Read the product disclosure statement (PDS) for any insurance policy; this classification analysis does not determine whether a claim is covered.
This is general information, not financial or legal advice. If the classification or contractual terms remain unclear, obtain current legal or tax advice for the specific arrangement.
Sources
- Difference between employees and independent contractors | Australian Taxation Office
- Employee or independent contractor | Australian Taxation Office
FAQ
Does an “independent contractor” clause make a cleaner a contractor?
No. Classification depends on the legal rights and obligations in the whole relationship, and the contractual label is neither decisive nor relevant.
Does a written agreement override how the cleaning work is organised?
The agreement establishes the starting point, but conduct can vary its terms. Everyday practices matter only if they are sufficient to produce a contractual variation.
Is a cleaner working more than 30 hours per week automatically an employee?
No. Domestic work exceeding that threshold is one stated circumstance for superannuation treatment of a contractor deemed to be an employee, not the general classification test.
What should I do if the cleaner’s status is unclear?
Identify the contracting party, review the whole legal relationship and check the current ATO guidance. For insurance questions, check the policy’s PDS as well.
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