Commission sales persons considered as self-employed 043-03050010

This document outlines the factors used in determining the nature of business of commission sales persons, and how income is assessed for commission sales persons who are considered to be self-employed.

Determining if a customer is self-employed or an employee

As a general policy, a person who is employed on a commission basis to sell a product and/or recruit other commission salespersons, is employed under a contract for service and is self-employed. If the employment contract is a contract of service then the person is an employee.

People who can generally be characterised as self-employed include consultants and distributors involved in Avon, Tupperware, Amway and similar products or businesses.

If a person is regarded as self-employed they are considered to be a person who carries on a business. The income assessed is the gross income less allowable deductions that is, it is the net profit earned by the business after deductions, not gross income of the business, which is assessable as income of the customer.

Related links

Commission sales persons considered as employees

Income for an independent contractor and commission income