You must be paid to produce a specific result.

To meet this condition, you must produce a specific result or outcome before being entitled to be paid.

Generally, you’re paid to produce a specific result when:

• payment is made after contractual conditions have been fulfilled – for example, only on completion of each job or specific objectives (this can include receiving progress payments and deposits)
• being paid an amount for an agreed number of completed items or activities – for example, a furniture upholstering business that is contracted to a furniture factory and paid a specified amount to complete 100 lounge suites.

Generally, you’re not paid to produce a specific result if you’re paid:

• based on an hourly or daily rate for the work you perform
• regardless of whether you achieve a specific outcome or reach agreed objectives.

If you're paid on an hourly basis or daily rate for the services you provide, it's unlikely that you will meet the first condition of the results test. This is because payments on an hourly or daily basis are not generally linked to producing a specific result or outcome.

Example: not paid to produce a result

Joseph provides services to a local authority through his company JoCo, which has entered into a contract with the local authority.

Under the terms of the contract, Joseph must work 40 hours per week for the authority and will be paid based on an hourly rate.

At the end of each fortnight, JoCo issues an invoice to the local authority for hours worked by Joseph and receives payment.

The contract does not meet the first condition of the results test because JoCo:

• isn't contracted to complete a specific job
• isn't paid on the condition that the job is completed
• is paid for time worked rather than the results produced.