"Is the person an independent contractor or an employee?" That is the question! This debate is very controversial and widely misinterpreted. In an effort to provide concise guidance for taxpayers, the SA Revenue Service (SARS) have released issue two of Interpretation Note (IN) No. 17 dated January 9, 2008. The IN sets out two sets of tools to assist in determining whether a person is an independent contractor for the purposes of employees’ tax. The first test is known as the statutory test. In the event that the statutory test is conclusive, it means that a person is deemed not to be an independent contractor for the purposes of determining employees’ tax. The second test is known as the common law test. This test comprises rigid rules in determining whether or not a person is an independent contractor. The IN states that the statutory test must be considered first in determining whether the person is an independent contractor. The common law test will be applied where the statutory test is not applicable.