June 5, 2023

The Difference Between an Employee and an Independent Contractor

It’s important to know the difference between an employee and an independent contractor. Both have their own filing requirements and both have different implications on taxes. Employers withhold taxes from paycheck to paycheck from employees, whereas independent contractors typically pay taxes as they bring in income. In order to determine if a person is an employee or an independent contractor, you’ll need to determine the answer to these three questions:

• What type of behavioral control do I have over the worker? Are you in charge of when and where the worker is to perform services?
• What type of financial control do I have over the worker? Do you pay them a regular salary or hourly wages? Do they advertise for themselves and invest in their own materials without reimbursement?
• What is the relationship between the worker and the business? Is the relationship indefinite? Does the worker receive employee-type benefits?

There are consequences to a worker being labeled the wrong way so it’s important to get it right! See the article below to learn more.

author avatar
Melissa Calwell

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments
Would love your thoughts, please comment.x