Contracting
Can a Labourer Have an ABN? (2026 ATO Rules Explained)
Can a labourer have an ABN? Only if they genuinely run their own business. The ATO lists labourers among workers who are always treated as employees for tax and super, and the Australian Business Register says you are not entitled to an ABN for work done as an employee labourer, even if the job is called contracting.
That answer surprises plenty of people on Australian sites, where "bring your ABN" is still a common line in job ads. This guide explains what the ATO actually says, when a labourer can legitimately work under an ABN, what the 2026 super changes mean, and what to do if a builder asks you to get one. General information, not legal advice.
Does the ATO treat labourers as employees?
Yes. On its page explaining the difference between employees and independent contractors, the ATO states that some workers are always treated as employees: apprentices, trainees, labourers and trades assistants. WorkSafe Victoria uses the same list for WorkCover premium purposes.
The ABN entitlement page on the Australian Business Register goes further. It says you are not entitled to an ABN for work you carry out as an employee, including as an apprentice, trade assistant or labourer, even if you or your employer calls it contracting, and that an employer should not ask you to get an ABN as a condition of employment.
The ATO's myths list adds three points that matter on site:
- Having an ABN makes no difference to whether a worker is an employee or a contractor for a particular job.
- Sending invoices does not make someone a contractor.
- A contract that says "independent contractor" does not override an employment relationship.
When can a labourer genuinely be self-employed?
The word "labourer" in the ATO list describes someone selling their time and effort to another person's business. A person who does physical work but runs a real enterprise is in a different position. The ABR says you are entitled to an ABN if you carry on an enterprise, and the signs it looks for include a genuine commercial activity, an intention to make a profit, repeated and organised work, records, and doing things the way other businesses in the industry do.
Two examples from Western Sydney show the difference:
- Jake in Penrith turns up at 7 am, is told which skip to load and which trench to clean out, uses the builder's tools, gets paid $40 an hour for the hours he works and cannot send a mate in his place. He is working in the builder's business. That is employment, whatever the paperwork says.
- Mia in Blacktown owns a tip truck and a mini excavator, quotes fixed prices for site clean-ups and small excavations, carries her own public liability cover, works for several builders and sometimes hires a casual to help. If a job runs over, she wears the loss. She is running a business and can hold an ABN for it.
| Sign | Points to employee labourer | Points to genuine business |
|---|---|---|
| Control | Told what to do, when and how | Decides how the result is achieved |
| Payment | Hourly or daily rate for time worked | Quoted price for a defined result |
| Tools and plant | Supplied by the builder or covered by an allowance | Own vehicle, plant and equipment, no reimbursement |
| Delegation | Must do the work personally | Can send staff or subcontract |
| Risk | Paid regardless of the builder's profit | Carries the cost of defects and overruns |
| Clients | Works in one business | Markets to and works for several clients |
No single factor decides it. A worker can be a contractor for one job and an employee for the next, because each arrangement is assessed on its own terms.
What should you do if a builder asks you to get an ABN?
If the work is ordinary labouring on an hourly rate, being told to "get an ABN and invoice us" is a red flag for sham contracting. Under the Fair Work Act it is unlawful for a business to represent that an employee is a contractor unless it reasonably believes that is true. The Fair Work Ombudsman lists maximum penalties per contravention of $21,840 for individuals and up to $546,000 for larger businesses on its sham contracting page.
Practical steps:
- Ask whether the role is casual employment. If yes, you should receive a tax file number declaration, a super choice form, payslips within one working day of payday and the Casual Employment Information Statement.
- Get the rate and arrangement in writing before the first shift.
- Keep your own record of hours, sites and supervisors.
- If you are unsure, call the Fair Work Infoline on 13 13 94. Suspected misclassification can also be reported to the ATO.
Applying for an ABN when you are not entitled to one carries its own risk: the ABR warns that people who apply for an ABN, register for GST and claim refunds when they are not entitled may face prosecution.
Do labourers on an ABN still get super?
Often, yes. The ATO says a business must pay super for an individual contractor engaged under a contract that is wholly or principally for their labour. Under Payday Super, which started on 1 July 2026, super guarantee is calculated on qualifying earnings and must reach the fund within 7 business days after each payday. That rule also covers contractors paid mainly for their labour. The super guarantee rate is 12 per cent.
So a builder who pays a labourer on an ABN purely to avoid super usually gains nothing on super and takes on penalty risk. The ATO notes that paying an extra amount directly to the contractor instead of to their fund does not count as a super contribution.
How do ABN labourer rates compare with employee rates?
Indicative 2026 market observations from Australian job boards and hiring platforms (not legal minimums):
| Arrangement | Indicative band (AUD/hr) | What the rate has to cover |
|---|---|---|
| Casual employee labourer | $34–45 | Includes casual loading; employer adds super, workers comp, payroll tax where it applies |
| Labourer with own business and gear | $45–60 | Own tax, super, insurance, vehicle, tools and unpaid downtime |
| Labourer with plant (excavator, tip truck) | $90–140 incl. machine | Machine finance, fuel, servicing, insurance |
Award minimums for site labourers come from the Building and Construction General On-site Award and depend on classification. Confirm current award minimums in the Fair Work pay guides before agreeing a rate, and see our labourer day rate guide for day-rate comparisons. Our guide to how to pay labourers covers payroll steps for hirers.
Is it better to be a casual employee or an ABN contractor?
For most labourers starting out, casual employment is simpler and safer. You get casual loading, super paid on your behalf, workers compensation cover through the employer's policy and protection under the award. A genuine ABN business suits people who own equipment, want to quote whole jobs and are prepared to manage BAS, insurance and the risk of jobs going wrong. Our subcontractor vs employee guide compares the costs side by side.
How to find labouring work on Yakka
Yakka Labour is a hiring marketplace where builders, businesses and households post labouring jobs and workers apply directly. It is not the workwear brand with a similar name, and it is not an employer or labour hire agency: the hirer and worker agree the engagement themselves.
- Create a free profile in the Yakka app with your suburb, skills and tickets such as your white card.
- Apply for jobs near you and read the job post for the rate, start time and tickets required.
- Confirm the arrangement in writing with the hirer, including whether it is casual employment, before you start.
- Get paid through the platform once the work is done.
Hirers can browse labourers by suburb on the general labourer hub.
Hire labourers on Yakka · Sham contracting explained · Download the Yakka app
Frequently asked questions
Can I work as a labourer on an ABN and a TFN at the same time?
Yes, if the arrangements are genuinely different. You might be a casual employee for one builder, paid with tax withheld under your TFN, and run a separate small business with your own equipment and clients under an ABN. Each job is assessed on its own terms, so an ABN only applies to work you do as a genuine business, not to ordinary hourly labouring.
Do I pay more tax as a labourer with an ABN?
Not necessarily more, but you pay it differently. Nobody withholds tax from ABN income, so you need to set money aside, lodge your return and possibly pay PAYG instalments. If your turnover reaches the GST threshold you also register for GST and lodge BAS. Many sole traders put away 25 to 35 per cent of each payment to cover tax and super.
Can a labour hire company make me get an ABN?
A labour hire firm that pays you an hourly rate to work under a host builder's direction is normally your employer. The ATO says the labour hire firm is responsible for PAYG withholding and super for workers it places. Being told to supply an ABN for that kind of placement is a warning sign, and you can check your situation with the Fair Work Infoline on 13 13 94.
What happens to a builder who pays labourers on ABNs incorrectly?
The ATO can apply PAYG withholding penalties and the super guarantee charge, which includes the unpaid super, interest and an administration fee, plus possible additional penalties of up to 200 per cent. Separately, the Fair Work Ombudsman can take sham contracting action in court, and unpaid wages or entitlements can be recovered by the worker.
Does an ABN labourer need workers compensation insurance?
A sole trader generally cannot cover themselves under state workers compensation schemes. Regulators such as icare in NSW suggest personal accident and illness cover or income protection instead. Depending on the state and the arrangement, a contractor paid mainly for labour may still be treated as the principal's worker for workers compensation, so builders should check with their regulator.
Official sources
Award rates, licences and safety rules change. Check the official source before you hire or take on a shift.
- Fair Work Ombudsman — pay guidesMinimum award rates, casual loading and penalty rates
- Fair Work Pay CalculatorWork out the minimum pay for a specific award and shift
- Safe Work AustraliaNational work health and safety framework, including high-risk work licences
- WorkSafe VictoriaConstruction induction, high-risk work licences and WHS rules in Victoria
- Australian Taxation Office — super for employersSuperannuation guarantee obligations when you pay workers
