Casual, ABN, or HIT? How to Choose the Right Contractor Engagement Model 

Choosing the right engagement model is an important step in managing your contracting career. Whether you're working independently, through a company, or considering casual employment, each pathway comes with its own obligations, benefits, and cost structures.



This guide outlines four engagement types available to contractors working through our network. It’s designed to help you understand your options and make informed decisions based on your circumstances, income level, and preferred way of working.

Casual Employee (Flex Worker)

Best for: Individuals who do not meet the criteria for other engagement types.

• Contract Type: Casual
• Payroll: Whizdom manages superannuation, taxation, and salary packaging.
• Insurances: Covered by Whizdom
• Benefits: Full salary packaging options available. Please note, casual engagements attract higher statutory costs, adding approximately 2.75% to client on-costs.

Independent Contractor – High Income Threshold (HIT)

Best for: Contractors earning over $183,100 per annum without an ABN company who prefer not to be engaged as casual employees.

• Contract Type: Independent Contractor
• Payroll: Managed by Whizdom as PAYG Labour Hire. Income is classified as Personal Services Income (PSI).
• Insurances: Covered by Whizdom
• Benefits: No need to manage an ABN company. Lower on-costs for clients and competitive rates. Salary packaging is not available under this model.

Independent Contractor with Own ABN Company

Best for: Contractors operating through their own ABN company.

• Contract Type: Independent Contractor
• Payroll: Managed by the contractor’s company, including superannuation and taxation obligations.
• Insurances: Must be held by the contractor, including Workers Compensation and Professional Indemnity/Public Liability (PI/PL). Insurance limits vary by client agreement.
• Benefits: Greater financial control, potential tax advantages, and competitive rates with reduced client on-costs.Same Day Pay for approved timesheets
• Salary packaging and LAFHA options
• Novated vehicle leasing
• Competitive margins thanks to our self-funded model

Independent Contractor – Nominated Payroll Company

Best for: Contractors without an ABN company who prefer payroll to be managed by a third-party provider.

• Contract Type: Independent Contractor
• Payroll: Managed by your nominated payroll provider, including superannuation, taxation, and packaging.
• Insurances: Covered by Whizdom
• Benefits: No need to manage an ABN company. Competitive rates and potential access to salary packaging through your provider.

Important considerations

Before choosing an engagement type, we recommend reviewing the latest guidance from trusted sources:

• ATO: Difference between employees and independent contractors
• Fair Work Ombudsman: Independent contractor changes
• Fair Work Ombudsman: Opting out of the whole of relationship test
• Fair Work Act 2009 – Federal Register of Legislation
• Casual Employment Information Statement (CEIS)

Need Help Deciding?

If you're unsure which engagement option suits your situation, Contact us   for a confidential discussion. We’re here to help you understand your choices and ensure your engagement aligns with your goals and obligations.