For seasonal businesses, hiring more hands for the busy season is standard practice. After all, more work means getting more staff to cover the uplift. It sounds simple, but hiring, especially depending on the working arrangement, carries more risk than most business owners realise. Here’s how to stay compliant when you’re staffing up.
Seasonal work: Casual or contractor?
There are two ways to bring someone on for a few weeks: either as a casual employee or an independent contractor. Most seasonal hires are casuals. You roster them when you need them, they get a 25% loading instead of leave, and when trade drops away, you stop giving them shifts.
On the contractor side, they have an ABN, they send you an invoice, and there’s no payroll to run. That’s where owners can get stuck, because whether someone is legally a contractor isn’t up to you or the contractor to decide.
Why “just put them on an ABN” doesn’t work
An ABN is a tax registration number. It doesn’t make someone a contractor any more than a driver’s licence makes someone a courier.
The ATO works it out from the rights and obligations in the working relationship. If you set the hours, organise the work, supply the gear, and the person can’t send someone else in their place, then that’s an employee, whatever the paperwork says.
There’s also a second rule that often catches people out. If a contract is wholly or principally for someone’s labour, you owe super on it regardless of the ABN. In simpler terms, a casual working your shifts over summer is about as “principally for labour” as it gets.
Hiring the wrong way is expensive
Mistakes in the hiring process are expensive and time-consuming to fix. If the ATO or Fair Work catches it, you could be liable for the super guarantee charge (including unpaid super), unpaid casual loading, unpaid penalty rates, and interest.
Since Payday Super started on 1 July 2026, the super guarantee charge is tax-deductible, reversing the old rules. But it’s still not cheap. The charge covers the shortfall, notional earnings, and an administrative uplift. The 25% or 50% late-payment penalties and general interest charge remain non-deductible.
On top of that, sham contracting — intentional or not — carries significant civil penalties per contravention. The Fair Work Ombudsman and the ATO are both actively enforcing it.
Also bear in mind that if a genuine contractor doesn’t quote an ABN, you’re required to withhold 47% from the payment.
Example: Marty needs to hire for the busy season for eight weeks
Marty’s Cafe gets extremely busy between mid-December and mid-February. Marty is a sole trader with two casuals already, but he needs one more person for 25 hours a week for eight weeks.
Marty’s hiring options
Marty has two options to hire from:
- Option A: Hire a casual on the Hospitality Award, Level 1, at $33.05 an hour.
- Option B: A mate’s nephew has an ABN and will invoice at a flat $35 an hour.
Comparing the numbers
Option A, casual: $33.05 × 25 hours × 8 weeks = $6,610. Add 12% super ($793.20) and 2% workers comp ($132.20). Total: $7,535.40.
Option B, ABN: $35 × 25 × 8 weeks = Total: $7,000
These figures assume weekday shifts. Weekend and public holiday hours cost more under either option. Upfront, Option B looks like it saves Marty $535.40. But that figure doesn’t account for super, workers comp cover, or weekend penalty rates, and none of those disappears just because there’s an invoice involved. Why? Because Option B doesn’t properly fit the definition of a contractor.
The nephew works Marty’s rostered shifts, uses Marty’s machine, follows Marty’s instructions, and can’t send a substitute. He’s an employee in everything but the invoice.
So, Marty still owes super on the labour, which is 12% of $7,000 = $840. He’s also underpaid weekend penalty rates. To make matters worse, he has no workers’ comp cover for someone the scheme would almost certainly treat as his worker, which will matter a great deal if there’s a burn or slip incident.
The result if Marty chose the wrong option
Option B’s actual minimum to pay is $7,840 against Option A’s $7,535.40. What was initially thought to be the “cheap” option is $304.60 more expensive before penalties are accounted for. Option A was cheaper all along.
Casual vs contractor rules
Cross-reference what determines an employee vs. a contractor with the ATO before you agree to anything. If you’re setting shifts and supplying equipment, just price it as a casual and move on.
| Employee | Contractor | |
|---|---|---|
| Who sets the hours? | You do | They do |
| Who supplies the tools? | You do | They do |
| Can they send someone else? | No | Usually yes |
| What you're paying for | Their time | A result |
| Who carries the risk? | You do | They do |
| Super | You pay 12% | You might still pay 12% if the contract is mainly for their labour |
| Workers comp | You must cover them | Usually covers themselves – check your state scheme |
| Tax | You withhold PAYG | They handle their own |
Can you hire someone just for December and January?
Yes. A casual has no guaranteed hours, so when business slows down, you just stop rostering them. While there’s no notice, no redundancy and no termination conversation needed, it’s good practice to have conversations on end dates before the last day of work.
You can also use a fixed-term contract with a stated end date, which suits a defined project better than a seasonal rush. For most summer hires, casual is easier, and it gives you more room to move if trade doesn’t flow the way you planned.
What you can’t do is roster someone like a part-timer for months, with the same shifts every week, and still call it casual. If there’s a firm advance commitment to ongoing work, the casual label won’t hold up — and after 12 months they can ask to go permanent anyway.
Can the hours change week to week?
With a casual, yes — that’s the whole point of the arrangement. You give them shifts, they accept or decline, and nothing obliges either of you beyond that particular shift.
But watch the award’s minimum engagement. Most awards set a minimum shift length, so calling someone in for an hour can cost you two or three.
What paperwork do you need before a hire’s first shift?
Before the first shift, you’ll need:
- A TFN declaration
- A super standard choice form (if they don’t choose a fund, request a stapled fund from the ATO)
- Workers’ comp cover that includes the new person
- Payroll software that reports through STP and is Payday Super compliant
You also need to give every new casual the Casual Employment Information Statement as well as the Fair Work Information Statement.
Then check the rate. Summer trade means weekends and public holidays, which are more expensive. Under the hospitality and retail awards, a casual on a public holiday is on 250% – and that figure already includes the 25% loading, so don’t add it twice.
Avoiding hiring mistakes for the summer season
When hiring for the busy season, it’s easy to get caught up in options that seem quicker and cheaper. For Marty, Option B was just that, and it would have left him with a mess to clean up and cost at least $304.60 more, not including penalties.
Before hiring, take time and look into your options. A good rule of thumb is: if you’re setting the shifts, you’re hiring an employee. Finally, use payroll software that calculates super, is Payday Super compliant, and reports through STP in one place to avoid Option B’s hidden costs.
