Congratulations on getting this far to become a Hero!
Being a Hero means that you are providing your services directly to HCH members as a contractor.
An independent contractor is different from being an employee. There are few things you need to know. Even if you have been a contractor elsewhere you should take the time to take a refresher.
We have created this as a guide to help Heroes manage their obligations as a contractor. Further information and resources are available from Self Employed Australia which is an association for contractors.
If you are unsure what business structure you have please follow this link for more information: https://www.business.gov.au/planning/business-structures-and-types. Generally, most Heroes provide their services as a sole trader.
Please note this guide is NOT legal accounting or tax advice and is only designed to alert you to things you need to be considering as a contractor. Advice to help people like you is readily available in most suburbs from accountants, tax agents and lawyers.
What does it mean to be a contractor?
As a contractor, you are self-employed. Thus, you run and take charge of your own business. This includes:
the risk of not having a steady income. Focus on building good relationships with our members as they are in charge of using your services;
not having the benefit of sick leave, paid holiday leave and other entitlements employees have. Simply change the availability on your profile if you can’t work.
the need to make your own arrangements for superannuation contributions;
the need to have your own equipment. Even though as Heroes, you don’t require equipment;
the need to have your own insurances. We’ve done the hard work and found insurance for you;
being responsible for if something goes wrong while you are providing your services to an HCH member (whether that results in an injury to you or the member).
You have the flexibility with your work and can decide your own schedule, which clients you want to work with and the location of your work.
You also have the flexibility to decide what you wear while performing your services. We provide you with a free HCH tee shirt when you become a Hero. You may choose to wear the tee shirt when you are providing the service to an HCH member, but you do not have to.
What happens if I get injured or sick?
HCH does not cover you for workers’ compensation insurance but we do offer Heroes group personal accident and sickness which can cover you for loss salary due to an injury or sickness.
We strongly recommend that you consider whether you need to purchase personal accident and illness insurance to cover you if you are unable to work as a result of injury or sickness.
As a contractor, you do not accrue sick days, paid holiday leave or other employee entitlements. You are responsible for organising and funding your own holiday and sick leave.
You should account for sick days and holiday leave when you are planning your work schedule and budget.
Do I need to invoice members myself?
Ordinarily, you would send the invoice directly to the member. However, since our members may have complicated government funding requirements, we take care of all this for you.
We do this on your behalf as part of the platform services. We also collect the money from the member on your behalf and deposit the fees less our platform fees directly into your bank account.
You can view your invoices on the Hero Dashboard when you log into your account.
What are my Tax obligations?
Contractors are responsible for charging Goods and Services Tax (GST) in respect of the services they perform, and they are responsible for accounting for the GST they collect by lodging a Business Activity Statement periodically.
However, there are many exemptions which may apply to you in respect of your GST obligations.
Is your GST Turnover under$75,000?
Your GST Turnover = gross business income (not your profit).
If your GST turnover is less than $75,000 then you do not have to be registered for GST.
Is your GST Turnover over $75,000?
If yes, you will need to register for GST.
However, A New Tax System (Goods and Services Tax) Act (1999) (GST ACT) specifies types of services which are GST exempt.
If you are providing services which fall into one of the following categories then the services you are providing are GST exempt.
Section 8-30(3) of the GST Act states “A supply of *home care is GST-free if the supply is of services:
(a)that are provided to one or more aged or disabled people; and
(b)that are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the *Quality of Care Principles.”
All HCH members are either aged is disabled, thus item (a) is satisfied.
You will need to satisfy yourself whether you are providing the following services, which will satisfy item (b):
Quality of Care Principles
Personal assistance, including individual attention, individual supervision, and physical assistance, with the following:
a)bathing, showering, personal hygiene and grooming;
b)maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management;
c)eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary);
d)dressing, undressing, and using dressing aids;
e)moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids;
f)communication, including to address difficulties arising from impaired hearing, sight or speech, or lack of common language (including fitting sensory communication aids), and checking hearing aid batteries and cleaning spectacles.
Is your GST Turnover over $75,000 and youare performing services which are not described above?
If the services you are providing do not fall within one of the above categories, then GST may be chargeable on the amount of fees you receive in respect of those services.
You should contact email@example.com at HCH to discuss your situation.
Other Tax Obligations
You may be required to pay income tax on the other money which you receive from performing your services.
We strongly recommend:
you engage a tax agent to assist you with the preparation with your tax return each year (to ensure that you are correctly claiming deductions); and
you budget and save for the likely income tax you will have to pay.
Remember - the amount of tax will depend on the amount of income you earn not only through the platform but also from other sources.
Do I need insurance?
Insurance on the Job
You have the benefit of a limited public liability policy we have established for the benefit of our Heroes. Details of the policy are available here. https://www.homecareheroes.com.au/insurance_policy
You are responsible for confirming that the policy is suitable for you and whether or not you want to obtain additional insurance.
Workers Compensation Insurance/Accident Protection Insurance
Workers’ compensation is covered by state or territory laws. Some contractors are covered for worker’s compensation in some states and in specific circumstances.
In New South Wales, contractors are not entitled to workers’ compensation insurance (including under the iCare scheme) unless you have arranged your own insurance.
For further details you can contact Safe Work Australia on 1300 551 832.
Home Care Heroes Pty Ltd
Published on 10 December 2018