By Greg Allan, tradesman and creator of Data First Coaching
Why do so many gardening businesses get sub vs employee wrong?
Most gardening businesses look at the wrong signal first: whether the mower has an ABN, invoices for the job, or calls themselves a contractor. None of that decides anything on its own. The Australian Taxation Office says “having a registered business name makes no difference to whether a worker is an employee or independent contractor,” and the same reasoning applies to an ABN or an invoice (Myths and facts, ATO).
A gardener who takes on a sub for the seasonal flush of mowing, edging and hedging, or puts someone on the books to cover a growing round of strata and commercial grounds work, is often making the call on the label rather than the working arrangement. That is the first place it goes wrong, and it is the easiest to fix once the owner knows what actually matters.
Why does this classification matter more than the tax question?
It matters because whichever way the person is engaged, their time and materials still have to be booked against the job correctly, and that is what decides whether a round or a strata contract is actually profitable. Getting the legal status right protects the business from penalties. Getting the booking right protects the margin.
A gardener who prices a hedge job, a weeding visit or a mowing round around how fast they can do it themselves, then hands that same job to a sub or a new employee, often finds it takes longer and uses more fuel, mulch or green waste tipping than the quote allowed for. The job has to be priced for the average person’s time on the ride-on, not the owner’s best day. A healthy looking markup on fertilising, pruning or mulch can calculate out to a far thinner margin once real labour time is counted properly, and the same looseness can hide inside a sub’s day rate or an employee’s wage if it is not booked against the right job.
How does a gardening business tell a subcontractor from an employee in Australia?
You tell the difference by looking at the whole working relationship, not any single fact. The Fair Work Ombudsman’s whole of relationship test weighs up who controls how, when and where the work is done, who carries the financial risk, and whether the person is running their own gardening business or working inside yours (Whole of relationship test, Fair Work Ombudsman). On that test, a worker who has “no financial risk (as this is the responsibility of their employer)” leans towards employee.
The ATO applies the same thinking for tax and super purposes. It says “to check if your worker is an employee or independent contractor, you need to review the whole working arrangement,” and the label on the contract does not decide how the relationship is treated (Employee or independent contractor, ATO). A binding ruling from the ATO, TR 2023/4, treats it as a question of fact, decided from the legal rights and obligations in the relationship, with control over how, when and where the work is personally performed carrying real weight (TR 2023/4).
Neither body will make the call for you. The Fair Work Ombudsman says plainly, “we (the Fair Work Ombudsman) can’t decide if someone is a contractor or an employee,” and “we can only give information and advice to help you make this assessment” (Independent contractors, Fair Work Ombudsman).
What does the whole of relationship test look at for a gardener?
For a gardening business, the test looks at who decides the route and method on a mowing round, who owns the mower, trailer and whipper snipper, who carries the risk if a rain day wipes out a week’s work, and whether the person can delegate the pruning or green waste run to someone else. A worker directed on when and how to mow, using tools the business supplies and paid by time rather than by the job, leans towards employee. A contractor who sets their own schedule, supplies their own gear, quotes the job and carries the risk if it runs long leans the other way (Classifying Workers or Contractors, icare NSW).
Workers compensation obligations sit alongside this question and differ by state and territory. In New South Wales, icare says a business is generally not required to insure genuine contractors, though no single factor is decisive on its own. In Queensland, WorkSafe notes that even a contractor with an ABN who is responsible for their own tax can still count as a worker for cover purposes if the engagement amounts to what is known as a contract of service (Who your policy needs to cover, WorkSafe QLD). There is also a line around sham contracting: the Fair Work Ombudsman warns against an employer misrepresenting an employment relationship as independent contracting, or dismissing an employee to re-engage them as a contractor doing the same work (Sham contracting, Fair Work Ombudsman).
This is general information, not legal, tax or employment advice. Check your own situation with the body named here or a qualified adviser.
How do you keep your labour costs accurate once you decide?
You keep it accurate by booking every hour, and every bag of mulch, fertiliser or green waste tipping fee, against the job it belongs to, whoever is doing the work. That is the number that tells you what a mowing round, a strata contract or a recurring maintenance contract actually nets, not what the quote looked like on the day it was written.
Most gardening businesses do this from memory at the end of the quarter, well after the rain days, the slow hedge job and the extra tip run have already eaten into the margin. AI agents, software that does a job the way you would, using your prices, your wording and your rules, can pull the real labour and material cost against each round or contract as the work happens, instead of waiting for the books to be reconciled months later. Thinking data first about labour cost, rather than relying on how the quote felt at the time, is what actually shows whether a sub or an employee is clearing what the price assumed.
Picture a gardener running a growing book of strata and residential rounds who could never get a straight answer on what a job really cost to run. Non-billable hours and drive time between properties were being spread across every job at a flat rate, so every round looked unprofitable on paper. Stripping those hours out dropped the figure so low it was clearly wrong too. An AI agent pulled the actual wages and overhead straight from the business’s own data and worked out the true cost of running a job, with billable hours properly factored in, so overhead now sits in its own bucket instead of being smeared across every round, and keeps the figure accurate as the business changes.
Where can you check the current rules?
- Whole of relationship test, Fair Work Ombudsman: the factors weighed up on control, risk and independence in a working relationship.
- Independent contractors, Fair Work Ombudsman: general guidance on contracting and the limits of what the Ombudsman can decide for you.
- Employee or independent contractor, ATO: how the ATO assesses the working arrangement for tax and super.
- Myths and facts, ATO: common wrong assumptions about ABNs, business names and invoices.
- TR 2023/4, ATO: the binding ruling on how employment is determined.
- Sham contracting, Fair Work Ombudsman: the rule against misrepresenting an employee as a contractor.
- Classifying Workers or Contractors, icare NSW: workers compensation classification in New South Wales.
- Who your policy needs to cover, WorkSafe QLD: workers compensation cover rules in Queensland.
How does Data First Coaching approach this?
Data First Coaching does not start with the legal test. It starts by pulling the gardening business’s own job and finance data through the Trade Business Intelligence, to see whether the labour and materials for every mowing round, hedge job or strata contract are booked where they belong, whoever carries out the work. That is usually where the real problem sits, not in the contract label. Greg Allan has seen gardeners price a job assuming “they’re really sparing on the materials, they’re hyper-efficient in doing the job,” then hand that same job to someone else without adjusting for it. The how is worked through inside the Academy, with members, because the Trade Business Intelligence is built by every member, for owners who are open minded, innovative and willing to share what they learn.
