asap You are a Tax Director in the following situations: a) A client of the firm has enquired about how to treat the income of Oliver Martin and  Erica Ferguson who both provide services to AGL Limited. The client indicates that  she is unsure of the type of employment and how to account for the income tax for  each person. The client provided Tamika with the following information: Oliver Martin Oliver Martin provides accounting services for the company. He uses his own computer.  He works from the company’s premises Monday to Wednesday only. He is paid at the  end of each month. To obtain his payment he must provide the company with an invoice  detailing the days worked. He is paid a daily rate of $30,000 for 8 hours of work. He  determines his own time of work. Tasks are assigned to Oliver by the Head of Reporting  & Finance. He reports directly to the Head of Reporting & Finance. Oliver is not entitled  to vacation leave, sick leave, and he does not a participate in the company’s pension  plan. There is no restriction on Oliver’s ability to provide services to other persons.  Erica Ferguson Erica is an on-call machine technician. She repairs the company’s machines in the  factory. She uses her own tools. For each machine serviced a flat fee is paid monthly.  Erica is also paid separately for repairs. Each month she provides a report to the  Operation Manager for the work done as well as her invoice for payment. One term in  Erica’s contract indicates that she is expected to dedicate all her time to AGL Limited.  She is provided with a lunch card which she uses to obtain lunch at the company’s  canteen. She also obtains medical and pension benefits.  Required (i) Provide guidance to Tamika on the factors she should consider in determining the  type of employment.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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You are a Tax Director in the following situations:
a) A client of the firm has enquired about how to treat the income of Oliver Martin and 
Erica Ferguson who both provide services to AGL Limited. The client indicates that 
she is unsure of the type of employment and how to account for the income tax for 
each person. The client provided Tamika with the following information:

Oliver Martin

Oliver Martin provides accounting services for the company. He uses his own computer. 
He works from the company’s premises Monday to Wednesday only. He is paid at the 
end of each month. To obtain his payment he must provide the company with an invoice 
detailing the days worked. He is paid a daily rate of $30,000 for 8 hours of work. He 
determines his own time of work. Tasks are assigned to Oliver by the Head of Reporting 
& Finance. He reports directly to the Head of Reporting & Finance. Oliver is not entitled 
to vacation leave, sick leave, and he does not a participate in the company’s pension 
plan. There is no restriction on Oliver’s ability to provide services to other persons. 

Erica Ferguson


Erica is an on-call machine technician. She repairs the company’s machines in the 
factory. She uses her own tools. For each machine serviced a flat fee is paid monthly. 
Erica is also paid separately for repairs. Each month she provides a report to the 
Operation Manager for the work done as well as her invoice for payment. One term in 
Erica’s contract indicates that she is expected to dedicate all her time to AGL Limited. 
She is provided with a lunch card which she uses to obtain lunch at the company’s 
canteen. She also obtains medical and pension benefits. 
Required
(i) Provide guidance to Tamika on the factors she should consider in determining the 
type of employment. 

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