Farm work is one of the most popular types of work for working holiday makers in Australia, particularly for those seeking to complete the 88 days of specified work required for a second or third visa. It is also one of the areas where the question of ABNs and employment arrangements comes up most frequently.
Why farm work often involves an ABN
Many farms and agricultural operations do not employ pickers, packers, and harvest workers directly. Instead, they contract with labour hire companies who supply workers on a contractor basis. If you are working through a labour hire company and being asked to invoice for your hours or paid on a piece-rate basis per kilogram picked, you are likely being treated as a contractor and will need an ABN.
In other situations, farms do employ workers directly as employees. In that case, you do not need an ABN and your TFN is the relevant number. The key is to ask the farm or labour hire company directly how the arrangement is structured before you start work.
The piece-rate arrangement
Piece-rate work is common in fruit picking, where you are paid per bin, per kilogram, or per unit picked rather than per hour. This type of arrangement is often structured as contracting work. If the arrangement requires you to have an ABN and issue invoices, then you need to register for one before you start.
Do not assume that because you are being paid per piece you automatically need an ABN. Some farms run piece-rate arrangements as employment. Ask before you assume.
What to watch out for
Be cautious of arrangements where the farm or labour hire company is vague about whether you are an employee or a contractor, or where they pressure you to get an ABN quickly without explaining why. Sham contracting, where a business treats someone as a contractor to avoid employment obligations when they are actually an employee, is illegal in Australia. If something does not feel right about how the arrangement is being explained to you, seek advice before proceeding.
Tax when you have an ABN for farm work
When you work under an ABN, no tax is withheld from your payments automatically. You are responsible for setting aside money to cover your tax liability and declaring all income in your tax return at the end of the financial year. Make sure you keep records of every payment you receive and every invoice you issue.
Need help?
Need an ABN for your farm work?
We help working holiday makers register for an ABN and understand their tax obligations before they start work. Get in touch and we will sort it out for you.
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