By Greg Allan, tradesman and creator of Data First Coaching
Why does this matter more than ticking an ATO box for a glazier?
For a glazing business, whether someone doing a shopfront install, a reglaze or an emergency boarding callout is a subcontractor or an employee is not just a compliance tick. It decides which bucket that labour cost sits in, and that bucket decides whether the gross margin on every job quote, from a shower screen to a full balustrade install, is telling the truth.
Most glaziers run a mix: one or two glaziers on wages doing day to day window and shopfront work, and a subbie brought in for a balustrade install or a run of breakage callouts after a storm. If that subbie's invoice, or an employee's wage, gets coded as overhead instead of cost of sales, the job looks more profitable on paper than it is. According to the ATO, Employee or independent contractor is a question your glazing business is responsible for answering correctly for tax and super purposes, because the details of the working agreement, not just the label on the invoice, decide it.
Why can't a contract or an ABN settle it on its own?
No. According to business.gov.au, having an ABN is not what decides if a glass installer is a contractor, and a written agreement that calls someone a subcontractor does not override the real working relationship if the facts say otherwise. The Fair Work Ombudsman's whole of relationship test says there usually is not one deciding factor, so every part of how the work actually runs has to be weighed together.
A lot of glaziers hand a measure-and-install subbie a one-page agreement and assume that settles things. The Employee or contractor decision tool from business.gov.au calls this a myth directly: an ABN or a contract does not remove an employer's tax and super obligations if the worker is, in practice, an employee. The whole of relationship test from the Fair Work Ombudsman says a worker who issues invoices and holds an ABN is not automatically a contractor, and every factor of the relationship should be considered together, because there usually will not be one deciding factor.
What does the law actually look at for your glazing business?
What decides it is control and delegation: who directs where and how the toughened glass gets measured, cut and installed, and whether the person can send someone else to do the job. According to the ATO, your business controls the work if you have the right to direct what work is done, where, how and when, and a worker who cannot delegate or subcontract the job is behaving like an employee, not a contractor.
Think about the difference between a glazier you have doing daily commercial shopfront and insurance work under your direction, your hours, your van and your glass supplier accounts, and a subbie you call in for a specialist balustrade install who quotes the job, brings their own tools, sets their own price and could send someone from their own crew instead. The Employee or independent contractor page from the ATO sets out control and the right to delegate as two of the clearest factors to check against your own arrangement.
Are your apprentices, labourers and install crew always employees?
Yes. An apprentice learning the trade, a labourer carrying frames onto a commercial site, or a trade assistant handling safety glass on a job are always employees, never independent contractors, regardless of what any agreement says.
The Fair Work Ombudsman's page on contractors in building and construction says an apprentice is an employee who learns their trade under a special training contract, and apprentices and trainees cannot be contractors. The ATO's page on hiring a new worker says apprentices, trainees, labourers and trade assistants are always employees, never independent contractors. For a glazier, that settles the question for your apprentice and your yard labourer before you even get to the subbie doing double glazing retrofits on the side.
How does getting this wrong show up in your gross margin?
It shows up as a gross margin that does not add up, and a gap between gross and net profit that widens without an obvious cause. If a subbie's invoice for a double glazing job, or an employee's wage for emergency boarding work, sits in the wrong bucket, the true cost of operations for that job is wrong, and every quote built on it is wrong too.
Picture a glazier working out why a run of insurance jobs look unprofitable on paper even though the diary is full. Non-billable hours, quoting, measure visits, chasing a glass supplier on lead time, are loading a heavy overhead cost onto every billable hour, so every job on the board looks like it is barely covering its costs. Strip those non-billable hours out altogether and the cost figure falls so low it is obviously wrong the other way. The real answer sits somewhere between the two, in the business's own wages and overhead data, not in a guess.
This is where AI agents change what is possible. An AI agent is software that does a job the owner's way, using the glazing business's own prices, wording and rules, rather than a generic formula. An AI agent can pull the actual wage and overhead figures straight from the business's own job and finance data, work out the true cost of operations with billable hours properly factored in, and keep overhead and non-billable cost in its own bucket instead of spread across jobs. That is data first: starting from what the business's own numbers say this week, not from memory of what a job usually costs.
The same data answers the super question too. According to the ATO's page on super guarantee eligibility, independent contractors paid mainly for their labour are eligible for super guarantee, calculated on the labour part of their invoice, even if they quote an ABN. A subbie you bring in for a balustrade install or a stretch of breakage callouts can still trigger a super obligation if most of what they are invoicing is their own labour rather than materials or glass supplier costs.
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?
- Employee or independent contractor, ATO: sets out the control and delegation factors used to tell a worker apart.
- Independent contractors, Fair Work Ombudsman: explains it only gives information and advice, it does not decide for you.
- Employee or contractor decision tool, business.gov.au: clears up the ABN and written agreement myths.
- Contractors in building and construction, Fair Work Ombudsman: covers apprentices, trainees and residential building sector differences.
- Difference between employees and independent contractors, ATO: on who is responsible for getting the classification right for tax and super.
- Hiring a new worker, ATO: confirms apprentices, trainees, labourers and trade assistants are always employees.
- Super guarantee eligibility, ATO: on when a subbie's invoice still triggers a super obligation.
- Whole of relationship test, Fair Work Ombudsman: how the factors are weighed together, with no single deciding one.
How does Data First Coaching approach this?
Data First Coaching starts from the glazing business's own job and finance data, not from a guess about where a worker sits. Greg Allan built his own trade business before working out where the subbie-or-employee line really was: “I was subcontracting for a mate of mine, probably for the first six months”, before stepping into pricing and costing work in his own right. That line moves as a glazier takes on more control of a job, which is exactly why it needs tracking in the numbers rather than habit. Inside the Academy, members work through where their own labour costs are sitting and what that is doing to their margin, because the Trade Business Intelligence is powered by every member who is open minded, innovative and willing to share what they find.
