# Hiring Your First Cleaner: Employee vs Subcontractor in Australia Canonical URL: https://tidyly.au/resources/hiring-cleaner-employee-vs-subcontractor-australia Markdown URL: https://tidyly.au/resources/hiring-cleaner-employee-vs-subcontractor-australia/content.md Author: Tidyly Editorial Team Category: Start & compliance Published: 2026-07-27T09:00:00+10:00 Updated: 2026-07-27T09:00:00+10:00 Primary keyword: hiring cleaner employee vs subcontractor Australia Language: en-AU Geographic focus: Australia > The decision between hiring an employee and engaging a subcontractor isn't just a preference, it's a legal classification based on the actual working relationship, not what a contract calls it. Getting this wrong carries real financial and legal risk, so it's worth understanding the distinction properly before bringing on your first extra pair of hands. ## Key Takeaways - Classification follows the real legal relationship, not the label on an agreement. - Employees bring award, payroll, super, leave, safety and record obligations. - Genuine contractors operate an independent business and carry different risks. - Use current Fair Work, ATO and professional advice before engaging the worker. **Quick answer:** The decision between hiring an employee and engaging a subcontractor isn't just a preference, it's a legal classification based on the actual working relationship, not what a contract calls it. Getting this wrong carries real financial and legal risk, so it's worth understanding the distinction properly before bringing on your first extra pair of hands. ## Why This Decision Matters More Than It Seems Some businesses engage a "subcontractor" specifically to avoid superannuation, award entitlements, and workers compensation obligations. Fair Work and the ATO both look past the label used in a contract to the actual nature of the relationship, and a misclassified employee can result in significant back-pay, penalty and superannuation liabilities. ## The Core Test Broadly, the more control you exercise over how, when and where the work is done, the more likely the relationship is genuinely employment rather than contracting. Key factors that tend to point toward employment include: The person works set hours you determine, not hours they choose. They use your equipment and products, rather than supplying their own. They work solely or primarily for your business, rather than running their own independent operation with other clients. You direct exactly how the work should be done, rather than simply specifying the outcome required. Factors that tend to point toward genuine contracting include the person operating under their own ABN, supplying their own equipment, setting their own hours, working for multiple clients, and carrying their own insurance. ## What Changes If You Hire an Employee Award coverage applies, generally the Cleaning Services Award, with minimum pay rates, casual loading if applicable, and penalty rates for weekend or public holiday work. Superannuation contributions are required on top of wages. Workers compensation insurance becomes a legal requirement in every state. Basic employment records need to be kept, and Fair Work's National Employment Standards apply. ## What Changes If You Genuinely Engage a Subcontractor The subcontractor is responsible for their own tax, superannuation and insurance. You're not required to provide award entitlements, since the relationship isn't employment. You still carry some responsibility for ensuring genuine subcontractors have appropriate insurance and are operating legitimately, particularly if they're working on your customers' properties under your business's reputation. ## Getting the Paperwork Right Either Way For an employee: a written employment agreement, superannuation setup, and payroll processes that correctly apply the relevant award. For a genuine subcontractor: a written agreement confirming the independent nature of the arrangement, confirmation of their ABN and insurance, and an invoice-based payment process rather than a payroll one. ## Why Getting This Wrong Is a Real Risk, Not Just a Technicality A business that engages someone as a "subcontractor" while directing their hours, supplying their equipment and treating them functionally as an employee is exposed to back-payment of wages, superannuation and potential penalties if the arrangement is later found to be genuine employment. This risk applies regardless of what both parties originally intended or agreed to on paper. ## A Simple Way to Decide If you need someone working your set hours, using your equipment, exclusively for your jobs, you're very likely looking at employment, and should structure it, and pay it, accordingly. If you're bringing in another established cleaning operator, with their own ABN, insurance and equipment, to help with overflow work on their own terms, that's more likely genuine subcontracting. When genuinely unsure, it's worth a direct conversation with an accountant or employment law adviser before the arrangement begins, not after a dispute arises. ## Frequently Asked Questions ### Can I simply choose to hire someone as a subcontractor to avoid super and award obligations? No. The classification depends on the actual nature of the working relationship, not a label chosen for convenience. A genuinely employment-style relationship remains employment regardless of the paperwork used. ### Does hiring a subcontractor remove all my responsibility? Not entirely. You still carry some responsibility for ensuring subcontractors working under your business are appropriately insured and operating legitimately, particularly given the reputational and liability exposure involved. ### What's the safest first step when bringing on extra help? Get clear, specific advice from an accountant or employment adviser based on exactly how the working relationship will actually function, rather than assuming a label alone settles the question. ### Does this distinction matter for a single casual shift, or only for ongoing arrangements? It matters regardless of duration. Even a single shift can be classified as employment if the working relationship meets the relevant tests, and the obligations apply from that first engagement. ## Summary The difference between an employee and a subcontractor comes down to the actual working relationship, not the label used. Getting this right from the first hire protects both the business and the person doing the work. ## Sources - [Employee or independent contractor](https://www.fairwork.gov.au/find-help-for/independent-contractors/whole-of-relationship-test) — Fair Work Ombudsman; checked 2026-07-28. - [Cleaning Award summary](https://www.fairwork.gov.au/employment-conditions/awards/awards-summary/ma000022-summary) — Fair Work Ombudsman; checked 2026-07-27. - [Entitlements for employees under the Cleaning Award](https://www.fairwork.gov.au/find-help-for/contract-cleaning/entitlements-for-employees-under-the-cleaning-award) — Fair Work Ombudsman; checked 2026-07-28. ## Related Tidyly Resources - [Cleaning Services Award Pay Rates and Employment Guide](https://tidyly.au/resources/cleaning-services-award-pay-rates) - [Cleaning Business Compliance in Australia: WHS, Chemicals and Local Requirements](https://tidyly.au/resources/cleaning-business-compliance-australia) - [Cleaning Business Insurance in Australia: What You Actually Need](https://tidyly.au/resources/cleaning-business-insurance-australia)