If I am a sole trader tiler with no employees, am I treated as an employee or a contractor for this purpose?

As a contractor. A sole trader contracting directly for work is the contracting party, not an employee of anyone, so the registration question that applies to contracting — not the employee exemption — is the relevant one.

Does this distinction apply to trades that do carry their own licence, like electrical work?

The clearest confirmed example on this page is a trade with no dedicated licence of its own. Where a trade does carry its own licence, that licence is generally required of the individual doing the work regardless of employment status, which is a different structure again.

Can a business avoid registration requirements by treating subcontractors as employees on paper?

That is a legal characterisation question about the actual relationship, not a labelling choice — how the work and the relationship are genuinely structured is what regulators and courts look at, not what a contract calls the arrangement.

What “licensed” means for a subcontractor vs an employee

In short

In several states, the same trade work needs no licence at all when it is done by an employee working under a registered or licensed builder, but does need a licence or registration when the same work is done by a subcontractor contracting directly.
Western Australia states this distinction plainly for tiling: an employee needs nothing, but contracting with others on building work above the threshold requires registration.
The question is not what trade someone practises. It is what role they are in on the job — employed under someone else’s licence, or contracting in their own right.

Two people doing the same tiling job on the same site can be in genuinely different licensing positions, and the difference has nothing to do with skill or experience. It comes down to whether they are an employee working under someone else’s registration, or a subcontractor contracting for the work in their own right.

This page sets out that distinction using the clearest confirmed example — tiling in Western Australia — and explains why it generalises to other unregistered-as-a-trade occupations.

The employee side of the line

Where a trade is not separately licensed in its own right, a person doing that work as an employee of a registered or licensed business is generally not required to hold anything personally. Western Australia’s own guidance puts this directly for tiling: no licence is needed to work as a tiler in WA when employed by a registered builder.

The reasoning follows the structure this whole cluster keeps returning to — the licence or registration attaches to the business taking responsibility for the work, and an employee operating under that business’s registration does not need a separate, personal credential for a trade that is not licensed on its own.

The subcontractor side of the line

The moment the same person contracts directly — taking on building work in their own right rather than as someone’s employee — the calculation changes. WA’s guidance is explicit that a tiler wanting to contract with others on building work above the threshold needs to register as a building contractor, even though tiling itself has no dedicated trade licence.

The trigger is not the trade. It is the act of contracting for building work directly, which is what pulls the person into the registration framework built around builders and contractors rather than around trades.

Why this generalises beyond WA and beyond tiling

This same structural distinction — nothing required as an employee, something required as a contracting party — shows up wherever a trade itself is unlicensed but building or contracting more broadly is regulated. It is a useful question to ask about any unlicensed trade: is the work being done as an employee under someone else’s registration, or is the person contracting directly for it.

It also explains a common source of confusion when a sole trader is both the tradesperson and the contracting business at once. They are not an employee of anyone, so the "nothing required" side of the line does not apply to them even in a trade that carries no licence of its own — they are the contracting party, and whatever registration attaches to contracting for that work applies to them directly.

How this same distinction plays out for insurance duties specifically

Questions

If I am a sole trader tiler with no employees, am I treated as an employee or a contractor for this purpose?: As a contractor. A sole trader contracting directly for work is the contracting party, not an employee of anyone, so the registration question that applies to contracting — not the employee exemption — is the relevant one.
Does this distinction apply to trades that do carry their own licence, like electrical work?: The clearest confirmed example on this page is a trade with no dedicated licence of its own. Where a trade does carry its own licence, that licence is generally required of the individual doing the work regardless of employment status, which is a different structure again.
Can a business avoid registration requirements by treating subcontractors as employees on paper?: That is a legal characterisation question about the actual relationship, not a labelling choice — how the work and the relationship are genuinely structured is what regulators and courts look at, not what a contract calls the arrangement.

Sources

Consumer Protection WA (Building and Energy) — WA regulator covering building contractor registration, home indemnity insurance and the Electrical Licensing Board.