Opting out of the whole of relationship test
Some workers can choose to not use the whole of relationship test when working out if they’re a contractor or an employee.
Learn more about opting out of the whole of relationship test.
On this page:
Opting out
The whole of relationship test is used by constitutional national system businesses (constitutionally covered businesses) and persons to work out if a worker is a contractor or an employee. This test is based on the definition of employment that applies from 26 August 2024.
Learn more at Whole of relationship test.
A worker who earns more than the contractor high income threshold can choose not to use the whole of relationship test to define their relationship. They can do this by giving a written opt out notice to the business that engages them. This means the start of relationship test will be used to work out if the worker is a contractor or an employee.
Learn more at Start of relationship test.
Contractor high income threshold
From 1 July 2024, the contractor high income threshold is $175,000.
Effects of opting out
Opting out may result in the worker being considered a contractor under the start of relationship test, where they could be considered an employee under the whole of relationship test.
If the worker’s contracting or employment status changes, they should consider the impact on their entitlements from the time their status changed.
Worker opting out
If a worker gives a written opt out notice to the business, then the start of relationship test will apply to the relationship from that date, rather than the whole of relationship test.
The notice must state that the worker believes that their earnings for work performed under the relationship are more than the contractor high income threshold at the time the notice is given.
Withdrawing an opt out notice
A worker can withdraw an opt out notice at any time after opting out by giving written notice to the business.
If an opt out notice is withdrawn, the whole of relationship test applies again from the day the notice is withdrawn.
A worker can only give one opt out notice per relationship.
Notifying a worker about opting out
The business that engages a worker can notify them that they can opt out of the whole of relationship test if:
- the business considers the worker may be an employee because of the whole of relationship test
- the worker earns more than the contractor high income threshold.
A business’s notice to the worker must be in writing.
A worker who wants to opt out has 21 days to provide an opt out notice to the business that engages them.
Source reference: Fair Work Act ss15AA-15AD
