By Greg Allan, tradesman and creator of Data First Coaching
Why is this hard to pin down for a stonemasonry workshop?
A stonemasonry business often runs several different working relationships under one roof, and that is exactly where the contractor-versus-employee question gets blurry. A workshop might have templaters and CNC operators on the tools, a polisher finishing benchtops, an installer doing the on-site fit of slabs, and a cladding or paving crew booked in for a run of paving. Many stonemasons take on exactly this mix, running the bench in the workshop while booking a subcontractor in for a one-off restoration or memorial job.
Each of those people can be engaged a different way, and the engagement, not the job title, decides their tax treatment, their KiwiSaver, and who carries the cost if a template is wrong or an install day is wasted. Greg teaches that before an owner even gets to the legal test, there is a more basic one: does the owner actually understand their own capacity and costings well enough to bring someone on properly, whichever way that person is engaged. Getting it wrong does not just risk a letter from a regulator, it can mean a cost sitting in the wrong place in the business.
What does New Zealand law actually look at?
New Zealand does not decide employee or contractor status from what a person is called on an invoice or in a text thread. Employment New Zealand runs a gateway test that looks at whether there is a written agreement saying the worker is independent, whether they can work for others, whether they can choose their own hours or send someone else in their place, and whether they had a fair chance to get independent advice before signing. If any part of that gateway test is not met, Employment New Zealand says the older common law test takes over, and under that test a worker can still end up being a contractor: “If any of the gateway test criteria are not met, the common law test applies. The worker can still be considered a contractor under the common law tes...”
Inland Revenue’s own tax technical guidance adds two more lenses: a control test, asking how much say the business has over the work and the way it is done, and a fundamental test, asking whether the person is really in business on their own account. Calling someone a contractor on a job sheet does not settle it either way: “It is not possible for taxpayers to alter their employment status (or the resulting tax implications) merely by calling themselves independent contra...” MBIE’s own briefing confirms that when status is challenged, the Employment Relations Authority and Employment Court work through this same stack of tests rather than a single checkbox.
What does Inland Revenue need once someone is engaged?
Once a stonemasonry business has decided how a person is engaged, Inland Revenue needs that decision reflected correctly in how they are paid. Inland Revenue’s own guidance sets out the practical signs either way: a self-employed stonemason doing install or template work usually supplies their own major tools, sets their own hours and prices, and can take on other clients, while an employee is usually paid a set rate for set hours and works under the business’s own equipment and rules.
Inland Revenue’s own first-time employer’s guide is blunt about what a contractor actually is: “A contractor is a person who works for you but is not your employee.” Contractors usually invoice for their work, and a business deducts withholding tax from certain schedular payments rather than running them through PAYE, a distinction set out in Inland Revenue’s employer’s guide, which specifically flags labour-only contract workers in the building industry as a category worth checking carefully. Getting this wrong at the paperwork stage, not just the hiring stage, is where many stonemasonry businesses actually run into trouble with GST and schedular payment obligations.
What should you actually check before deciding?
Before worrying about which form to sign, check whether there is enough quoted and booked work, benchtop fabrication, cladding install, paving, memorial and restoration jobs, to actually fill the hours of the stonemason, CNC operator or installer you are bringing on. Greg teaches that owners often hold off until the bank balance could cover a full year of wages, when the real question is whether there is capacity sitting unfilled right now.
This is general information, not legal, tax or employment advice. Check your own situation with the body named here or a qualified adviser.
Brought on properly, a templater, CNC operator or polisher should not just fill tool time in the workshop. The right person frees you from the bench or the install van to spend more time quoting, pricing and chasing the next slab job. The same goes for an external cladding or paving crew working as a contractor: the arrangement only works well when both sides are clear on what is expected and what a mistake, a wrong template, a chipped edge, a missed inspection, actually costs. That clarity matters as much as which box is ticked on the agreement.
How can your own data settle this instead of guesswork?
Your own job and pay data, not memory, is what shows whether a stonemason is really filling booked capacity or just adding cost, and whether their work pattern looks more like an employee’s or a contractor’s under the tests above. Decisions made from a feeling about how busy the workshop “seems” are usually made on an old picture, because the slab and benchtop pipeline changes every week.
This is where AI agents, software that does a job the way you would, with your prices, wording and rules, can take over some of the non-billable paperwork that used to sit with the owner at the end of the week. A data first approach starts from your own numbers rather than a generic checklist, so the time goes on getting the engagement right rather than redoing admin. AI agents can also keep onboarding and induction paperwork current once a decision is made, contractor or employee, without you redoing it from memory every time a new install crew joins.
Picture a stonemasonry business where team paperwork, site inductions, incident records and onboarding for a new installer or CNC operator were spread across different folders, with crew messages running through yet another app again. The owner built his own tool that pulls in job information and brings the forms, the site-specific inductions, the incident register and onboarding into one place, so nothing about a new starter, employee or contractor, gets missed in the rush of a busy install week.
Where can you check the current rules?
- Employee or contractor?: Employment New Zealand’s gateway test and when the common law test applies instead.
- Self-employed or employee: Inland Revenue’s practical signs for self-employed and employee status.
- IG0009 Tax Technical interpretation guideline: Inland Revenue’s control test and fundamental test explained in detail.
- First-time employer’s guide: what counts as a contractor and how schedular payments work.
- MBIE briefing on contracting status: how the Employment Relations Authority and Employment Court test status when it is challenged.
- Employer’s guide IR335, September 2026: PAYE deductions for employees compared with withholding tax for contractors.
- Employer’s guide IR335, June 2026: labour-only contract workers in the building industry and other schedular categories.
How does Data First Coaching approach this?
Data First Coaching does not start by asking whether someone should be a contractor or an employee. It starts by reading the stonemasonry business’s own job and capacity numbers through the Trade Business Intelligence, to see whether there is genuinely unfilled work for that stonemason to do, and where the real bottleneck sits before any engagement decision is made. Greg Allan puts it plainly: “you employ and then fill the capacity”, not the other way round. The how, working through the detail of a given workshop’s own numbers, 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.
