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Working in Australia’s booming gig economy? Know your rights and responsibilities

COVID-19 has boosted demand in areas of the gig economy such as food delivery, making it even more important that independent contractors working in these sectors know their rights and responsibilities.

The NSW Small Business Commission has published a Doing Business in the Gig Economy factsheet, which provides useful information for individuals and businesses engaged in or looking to operate in the gig economy, including information on requirements for registration and licences, insurance, tax obligations such as ABN or GST requirements, entitlements and workers compensation.

The Commission is seeking to improve the operating environment for independent contractors in the gig economy. In June 2021, it provided a submission to the State Insurance Regulatory Authority (SIRA) about personal injury insurance for food delivery riders.

The gig economy is an increasingly significant contributor to the State’s economy. NSW Government research found that between 2014 and 2016, the number of people working in the gig economy in NSW almost doubled to 92,400 and annual revenue increased from $1.6 billion to $2.6 billion.

Between 2015 and 2019, the Actuaries Institute found the Australian gig economy grew nine-fold to $6.3 billion, with a gain of 32 percent in 2019.

Doing business in the gig economy

This guide provides general information to those who work as independent contractors in the gig economy to assist them in
understanding their rights and responsibilities and what to consider when starting and operating a business.

What is the gig economy?

Participants in the gig economy provide services to consumers for a fee via digital platforms or marketplaces.
The gig economy is also known as the platform or app economy, the sharing economy or the on-demand
workforce. It covers a wide range of services including food delivery, household tasks, ridesharing and
courier services.

Participants offering services in the gig economy are often individuals. However, sometimes more established
businesses use these same platforms to find and connect with customers (such as an electrician looking for
supplementary electrical work).

Employee or independent contractor?

Individuals participating in the gig economy may have different rights and responsibilities depending on
whether they are considered an independent contractor or an employee.
It is common for gig economy platforms to regard participants as independent contractors, though whether a
worker is an independent contractor or an employee is determined by the nature of the relationship, not what
the arrangement is called.

For further information on the difference between an independent contractor and an employee visit Business.
gov.au: business.gov.au/people/contractors/employee-or-contractor

The Fair Work Ombudsman also provides information on protections at work for independent contractors:
fairwork.gov.au/tools-and-resources/fact-sheets/rights-and-obligations/protections-at-work. For general
advice: fairwork.gov.au/find-help-for/independent-contractors

Understanding your tax obligations

Participants in the gig economy should understand their tax obligations. There are different requirements for
independent contractors and employees. When getting started, independent contractors should:

• obtain an Australian business number (ABN)
• consider whether registration for Goods and Services Tax (GST) is required (for example, registration for GST
must be completed if you are providing ridesharing services or have a turnover of more than $75,000 a year)
• report and pay GST on an activity statement if registered for GST and an independent contractor
• keep records of income and expenses for both GST and income tax purposes (GST credits for work related
expenses can be claimed).

Contractor rights and protections

Independent contractors have different rights and protections in the workplace to employees. Information on
protections at work, unfair contracts, sham contracting, workplace health and safety relating to independent
contractors and associated support options is available at: business.gov.au/people/contractors/contractorrights-and-protections

Entitlements and workers compensation

Independent contractors do not receive entitlements, such as paid leave and notice of termination, unless they
are included in their contract. As an independent contractor in the gig economy, you may not be entitled to paid
leave if you’re unable to work due to injury or illness.
If involved in a workplace accident, independent contractors may not be entitled to workers compensation
payments.

The NSW State Insurance Regulatory Authority (SIRA) conducted consultations in 2021 on injury insurance
arrangements for gig economy food delivery riders. For more information: sira.nsw.gov.au/consultations/injuryinsurance-arrangements-for-food-delivery-riders-in-the-gig-economy

Managing risk and insurance

Participants in the gig economy should consider how they might be affected if unable to work if injured while
performing work. While insurance is not mandatory, common insurance policies obtained by gig economy participants include
income protection, liability insurance and asset and revenue insurance. For further general information on
business insurance: business.gov.au/risk-management/insurance/business-insurance. Some gig economy
platforms may require certain types of insurance as a condition of use.

There are resources available to help you find insurance cover online. It may also help to talk to an insurance
broker to discuss your business risks and understand your options.

  • Resources include:
    • Understand Insurance — understandinsurance.com.au
    • Insurance Council of Australia — findaninsurer.com.au
    • National Insurance Brokers Association — needabroker.com.au or 1300 531 073

Superannuation

Superannuation or “super” is money put aside as savings for an individual’s retirement. As independent
contractors, gig economy participants may not be entitled to superannuation payments by an employer and
may need to make their own contributions.

The ATO provides advice for independent contractors relating to superannuation: ato.gov.au/Individuals/Super/
Getting-your-super-started/Contractors/

Licencing

Some types of gig economy participants may require special registrations or licences. Check the Australian
Business Licence and Information Service (ABLIS) website: ablis.business.gov.au for licensing and other
requirements for the type of business you are planning to operate and for your local council area.
Managing financial commitments

Gig economy participants may make new financial commitments to support their work in the gig economy. For
example, leasing a vehicle to provide ridesharing services.

It should be factored in that gig economy platforms do not generally guarantee ongoing work, and other
unanticipated events may also impact on work levels and the ability of gig economy participants to meet any
financial obligations.

Before making significant financial commitments, consideration should be given to how to meet these financial
obligations if unable to earn enough income.

For more tips and guidance on making financial decisions: moneysmart.gov.au/

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