Key Distinctions Between an Employee and an Independent Contractor
Regarding workers, there are two types; the employee and the independent contractor. Anyone starting a business for the first time may not be aware of the types of workers. In the event that you are joining staff somewhere or starting your own business, you should note that the types of workers have many variances. Besides differences, examine the advantages and disadvantages of each type. Make sure you read the study below to discover the difference between independent contractors and employees.
First and foremost, it should clear that an essential factor you can use to tell the difference between an employee and an independent contractor is through looking at the tax situation. With an employee, the benefit comes in place by the fact that the employer handles the brunt of tax-related documents. On the contrary, the disadvantage is that the employees are given payroll taxes.
Another difference between an employee and an independent contractor is that the employee is given a consistent salary. The fact still remains that the employees will be recognized and the permanent assets of the employee and therefore have specific benefits like the healthcare plan. As an employee to get to gain more advantages such as the severance package, workers compensation, and special training.
More often, an employee is subjected to a tight work schedule suggested by the employer. While the statement seems disadvantageous, it also has benefits depending on the employee, check this site. It is undefinable that a set schedule can be constricting, nevertheless if you thrive on accountability, you can be more productive, find more info.
An independent contractor is a better option, especially if you want to have more freedom. Freedom maybe the advantage, but the disadvantage is that you will have more responsibility as an independent contractor. The advantage is that an independent contractor carries the burden of tax papers on their shoulder, and this can be a pain in the back.
Note that an independent contractor is considered self-employed by the internal revenue services. The other variance between an independent contractor and an employee is that an independent contractor gets paid only when the task is completed, click here. You will get the agreed amount so long as you deliver good work.
As contrary to an employee, an independent contractor will not get some benefits like healthcare, view here for more. As an employer, this can be a burden taken off your shoulders, but when you want to join the staff, you may be disadvantaged read more about these here. In conclusion, before you start a business or join work, ensure you understand the differences so that you can make an informed decision.