By Greg Allan, tradesman and creator of Data First Coaching
What actually decides if a gasfitter is a subcontractor or an employee?
For a gasfitting business, the test is not what the paperwork calls someone, it is the shape of the actual working relationship. According to the ATO, the details within the working agreement or contract determine whether a worker is an employee or an independent contractor for tax and super purposes. The ATO says employees work in and are part of the business, while independent contractors provide services to a principal's business. An employee's business has the legal right to control how, where and when the gas work gets done; a contractor can choose how, where and when the work is done, subject to reasonable direction.
Picture a gasfitting business bringing in another licensed gasfitter to help finish a gas line extension on a tight deadline. If that gasfitter turns up when told, uses the business's van and tools, and works under direct supervision on every job, that looks far more like an employee than a subcontractor, whatever the invoice says.
Why doesn't an ABN or an invoice settle it?
Many gasfitting businesses assume that because someone has an ABN, or because they submit an invoice for a callout or a compliance certificate, they must be a subcontractor. The ATO's myths and facts page says having an ABN makes no difference to whether a worker is an employee or an independent contractor, and submitting an invoice doesn't make a worker a contractor either. The whole working arrangement has to be looked at.
The Fair Work Ombudsman's page on independent contractors sets out what actually matters: the amount of control the business has over how the work is performed, who holds financial responsibility and risk on the job, who supplies the tools and equipment such as pressure test gear and leak detection kit, whether the worker can delegate or subcontract the work, how hours of work are set, and whether there is any expectation the work keeps going indefinitely.
What about apprentices, labourers and super on a subbie's invoice?
Some gasfitting businesses try to put an apprentice gasfitter or a labourer on an ABN to simplify the books. The ATO's page on hiring a new worker is direct about this: apprentices, trainees, labourers and trade assistants are always employees, never independent contractors. The Fair Work Ombudsman's page on contractors in building and construction says the same about apprentices and trainees, and adds that meeting the criteria of an employment relationship makes someone legally an employee even if a written contract calls them a contractor.
Super adds another layer. The ATO's page on super for independent contractors says if a gasfitting business pays a contractor mainly for their labour, that person is treated as an employee for superannuation guarantee purposes, whatever their ABN says. The ATO also warns that it's against the law to wrongly treat an employee as an independent contractor, so a gasfitting business needs to check it has got this right for every person on the tools, not just the ones doing bigger installs.
Why does getting this wrong hide the real cost of a job?
Where this really bites a gasfitting business is in the numbers, not just the paperwork. If you run a mix of subcontracted plumbers or gasfitters for a line extension and employed techs doing day to day servicing and callouts, every one of those people's labour has to sit against the job they actually worked, as a direct cost, not folded into general running costs.
Book a subbie's invoice to overhead instead of cost of sales, or let an employee's hours drift unrecorded against the wrong job, and every compliance certificate, pressure test and install on your books looks more profitable than the bank account shows. A data first view of each job, built from what each gasfitter or subbie actually billed against it, is the only way to see whether the quote on a gas line extension or a run of servicing calls actually returned what it promised. Memory doesn't catch this: a gasfitting business running on a feel for who worked which job usually finds the gap only when the figures are already weeks old.
How can AI agents keep subbie and employee costs lined up on every job?
An AI agent is software that does a job the way you would, following your prices, your wording and your rules. For a gasfitting business juggling subcontractor invoices and employee timesheets across callouts, safety checks and bigger installs, an AI agent can sit right at the point where labour gets booked, checking that a subbie's invoice for a gas line extension lands against that job's cost of sales, and that an employee's hours on a servicing round or a carbon monoxide check get coded the same way every time.
That matters because the fix has to go in before the cost is misbooked, not after the activity statement is already done. AI agents taking that checking off your hands also mean the office time goes on the next quote or the next compliance certificate, not on re-sorting last month's invoices to work out who actually did what.
This is general information, not legal, tax or employment advice. Check your own situation with the body named here or a qualified adviser.
Where can you check the current rules?
- Difference between employees and independent contractors, the ATO's core test for tax and super purposes.
- Independent contractors, the Fair Work Ombudsman's explanation of control, risk, tools and delegation.
- Super for independent contractors, when a contractor is treated as an employee for super guarantee purposes.
- Contractors in building and construction, rules specific to apprentices, trainees and the building and construction sector.
- Contractor entitlements and support, what protections and entitlements contractors do and don't get.
- Hiring a new worker, the ATO's checklist before taking someone on.
- Myths and facts, clears up the ABN and invoice myths.
- Gasfitter compliance and regulatory obligations, New South Wales licensing requirements for gasfitting work; other states, territories and New Zealand set their own licensing rules through their own regulator.
How does Data First Coaching approach this?
Data First Coaching starts from the gasfitting business's own job and pay data through the Trade Business Intelligence, looking at how subbie invoices and employee wages are actually booked against the compliance certificates, pressure tests and installs they were spent on, rather than starting from a conversation about who is on the books. That is where the real fault usually sits: labour cost hiding in overhead instead of cost of sales, quietly inflating gross profit on paper. Greg Allan, who has run his own trade business, describes the moment this finally gets fixed simply: “the relief with the full-time trades person was instant.” The how of setting it up this way is worked through inside the Academy, with members, because the Trade Business Intelligence is powered by every member who is open minded, innovative and willing to share.
