Lots of people have an opinion on using ABN’s as a labourer. There seems to be two questions really. One is “is it actually legal to be paid via ABN when your are working as a labourer?”. Two is, “do I make more money being paid as an ABN holder?”
The answer to the first question is NO. The Australian government has ruled that Labourers are not entitled to hold an ABN. This can be clearly found on the website where you apply for an ABN. It is also states on the website why Labourers are not entitled to hold an ABN. The short version – it’s not legal to work as a labourer and be paid via an ABN, end of story.
The answer to question 2 is also NO. Labourers whom are being paid on ABN need to realise that when you are paid on ABN your employer is not contributing to your superannuation, is not covering you for any accidents at work, generally not paying you overtime and is not paying any of your statutory tax obligations. All of these things are left to you. So, when you do take into consideration all these items you are probably earning less on ABN than if you were being paid correctly. Plus you are very much at risk if you are unfortunate enough to be injured at work. If you are being paid via an ABN the Australian Tax Office deems this an illegal act.
As labourer you must be paid via Tax File Number. Your employer must pay a minimum 9% superannuation on your behalf. Your employer must ensure they have adequate Workers Comp insurance to protect you while you are at work. Your employer must make the correct taxation deduction and payments on your behalf.
If you are doing labourering work make sure you get paid via TFN. Be protected and earn what your are entitled to.