How does a roofing business tell a subcontractor from an employee in Australia?

Why does the subcontractor question catch out so many roofing businesses?

Most roofing businesses only think hard about this when storm season hits and a restoration job needs extra hands fast. A roofer brought on to help with ridge capping or flashing on a re-roof can look like a subbie one week and an employee the next, depending on who set up the scaffold, who called the hours, and who carried the risk if a weather day was lost.

During a storm season surge, a roofing business often reaches for whoever is available: a mate with their own ABN, a labourer paid by the hour, or a subbie who quotes the whole re-roof as a job price. The lines blur fastest on insurance work, where the pressure to get a leak stopped before the next front rolls in leaves little time to think about who is actually running the job.

The cost of guessing wrong is not just an awkward conversation. It can mean a claim for unpaid entitlements, a super guarantee shortfall, or a reporting obligation missed at tax time, on top of the paperwork a roofing business already carries for scaffold permits, height safety checks and insurance assessors.

How do you tell a subcontractor from an employee on a roofing job?

You look at who controls the job, not what either of you calls it. The Fair Work Ombudsman says a contractor usually has control over how they do the work, including whether they can delegate or subcontract it, while an employee is directed on pay rates, hours and how the job gets done. The ATO uses six similar factors, checking who can delegate the work, how payment is worked out, who supplies the tools, who carries the commercial risk, and who controls the job.

Picture a roofer who quotes a whole restoration as a fixed price, turns up with their own scaffold, edge protection and ladders, and can send one of their own crew if they are tied up on another job. That looks like a subcontractor under the Contractors in building and construction guidance from the Fair Work Ombudsman. Now picture a labourer the business tells to turn up at eight, hands a harness and a list of what to do on the tile roof that day, and pays by the hour. That looks like an employee, even if there is an invoice instead of a payslip.

The ATO's building and construction examples page works through this with a concreter, and the same logic applies to a roofer: a supervisor who checks the quality of the ridge capping and chases deadlines is acting like an employer, and a worker with no right to send someone else up the ladder in their place is acting like an employee.

For some businesses, mainly companies rather than sole traders or partnerships, the Fair Work Ombudsman also applies a whole of relationship test that looks at the real substance and practical reality of the relationship rather than just the words in the contract. Which businesses this test covers, and the start of relationship test that applies instead for others, is set out on the Fair Work Ombudsman's independent contractors and start of relationship test pages. A roofer who thinks they have been labelled a contractor when they are really an employee can check the same factors, control, financial risk, who supplies the tools, and whether the work is expected to continue indefinitely, on the Ombudsman's employee or contractor page.

Does super guarantee apply to a roofing subcontractor?

Often, yes. According to the ATO, an independent contractor who is paid wholly or principally for their own labour is treated as an employee for super guarantee purposes, and this can apply to many roofers hired to help on a restoration or a re-roof rather than to run their own job.

A contract can count as wholly or principally for labour where the roofer is paid for their personal skill and hours rather than to deliver a finished result, performs the work personally, and the contract sits directly between the roofer and the roofing business rather than through a company, trust or partnership. A subbie who prices and runs their own guttering and downpipe installs under their own company name sits outside this, while a labourer paid by the hour to help with flashing and sarking on someone else's job often sits inside it.

Separately, a roofing business that pays contractors or subcontractors for building and construction work, and holds an ABN, generally needs to lodge a Taxable Payments Annual Report, because the ATO's own list of building and construction services names roofing and guttering specifically. Payments made to employees are not included in that report.

What should a roofing business track to get this right, instead of guessing?

The real answer sits in your own job data, not in memory of what was agreed on site. Who quoted the price, who supplied the scaffold and edge protection, who set the hours, and who carried the risk if a weather day was lost, these show up in your quotes, invoices and job notes, and they tell the truth even when the working arrangement has quietly drifted from how it started.

That is the data first view of this question: start from what your own records show about a given crew member, rather than from how the relationship felt when it began. A roofer who started out quoting whole jobs can end up turning up to the hours the business sets and using the business's own scaffold and height safety gear, without anyone noticing the relationship has changed.

An AI agent, which is software that does a job the way you would, following your own prices, wording and rules, can be set to check each new job and payment against the pattern that quote, invoice and timesheet data already show, rather than leaving it to be remembered at tax time. AI agents built on your own job records can also carry the ongoing paperwork, such as flagging which payments belong in a Taxable Payments Annual Report and which do not, so the office work gets done your way without it falling on whoever is least busy that week.

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?

• Contractors in building and construction, Fair Work Ombudsman: what counts as a contractor and an employee in building and construction, with common myths explained.
• Employee or independent contractor - what's the difference, ATO: the factors the ATO checks, including delegation, payment, tools and risk.
• Independent contractors, Fair Work Ombudsman: which businesses must use the whole of relationship test and which use the start of relationship test instead.
• Building and construction, ATO: worked examples in the building trades, including control over quality and deadlines.
• Super from your employer, ATO: when a contractor must be treated as an employee for super guarantee.
• Building and construction services, ATO: when a roofing business must lodge a Taxable Payments Annual Report.
• I think I could be an employee not a contractor, Fair Work Ombudsman: factors a worker can check for themselves.
• Start of relationship test, Fair Work Ombudsman: how the test works from what was agreed at the start of the arrangement.

How does Data First Coaching approach this?

Data First Coaching starts by looking at what a roofing business's own quotes, invoices, timesheets and payment records actually show about each crew member, rather than how the arrangement is remembered. Through the Trade Business Intelligence, Greg Allan's method looks for where the pattern has drifted, a subbie who now works the hours the business sets, or a labourer who has started supplying their own scaffold, because that is usually where the real question starts rather than at the moment someone asks if a worker is a contractor or an employee. The how, built from that data, 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 what they learn.