Farm work and ABNs - what you need to know before you start

Why does farm work often involve an ABN?

Many Australian farms do not employ pickers, packers, and harvest workers directly. Instead, they use labour hire companies who supply workers on a contractor basis. In that arrangement:

• The labour hire company asks you to invoice for your hours or pieces picked
• No tax is withheld from your payment
• No superannuation is paid on top of your wages
• You need an ABN to invoice correctly

If the farm employs you directly, you are an employee and your TFN is all you need.

Ask the farm or labour hire company directly how the arrangement is structured before your first shift. The answer determines everything that follows.

How does piece-rate work?

Piece-rate work is common in fruit picking, where you are paid:

• Per bin filled
• Per kilogram harvested
• Per unit picked or packed

Piece-rate arrangements are often structured as contracting work, in which case you need an ABN. However, not all piece-rate work is contracting. Some farms run piece-rate as employment, where you are paid per piece but still on a payroll with tax and super handled by the farm. Do not assume piece-rate automatically means contractor. Ask the farm.

What should you watch out for with farm work?

Be cautious if any of the following happen:

• The farm or labour hire company is vague about whether you are an employee or contractor
• You are pressured to get an ABN quickly without it being explained
• You are told you are a contractor but the work looks identical to that of employees who get super and leave
• Your hours are dictated, your tools are supplied, and you work exclusively for that business

These are signs of sham contracting, where a business misclassifies an employee as a contractor to avoid employment obligations. Sham contracting is illegal under Australian law. Get in touch with our team if you suspect this is happening to you.

Tax obligations when you have an ABN for farm work

When you work under an ABN, you handle your own tax:

• No tax is withheld automatically from your payments
• You must set aside enough to cover your tax liability at the end of the year
• All ABN income must be declared in your tax return
• You may not receive superannuation contributions from labour hire companies
• The same 15% working holiday maker rate on the first $45,000 still applies

Keep records of every payment received and every invoice issued. Good record-keeping makes tax time much simpler.