We often see employee's incorrectly classified as contractors by their employers.
It is important to know the difference between an employee and a sub-contractor as this will affect employer’s obligations (and employee’s entitlements) such as workcover and Superannuation Contributions. As an employer you can be subject to large fines as well as back payments if you don’t get it correct.
As an employer you can’t just decide that you will hire worker’s as subcontractors, and as an employee you can’t just decide to be hired as an sub-contractor, it is details within a worker’s working agreement (written or verbal) that determines your classification.
You can read more on the Fair Work website:
The difference between contractors and employees
The ATO also has a great tool to help you get it right:
Employee/contractor decision tool