Differences Between Employee and Independent Contractor
There are two different types of workers, one being an employee and the other being an 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. It is also your responsibility to analyze the cons and pros of the two types of works, click here for info. The following paragraphs will highlight the key distinctions between the two types of workers.
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. The main advantage that an employee has is that the employer takes care of the brunt of paperwork related to taxes. On the contrary, the disadvantage is that the employees are given payroll taxes.
As compared to an independent contractor, an employee is paid a consistent wage. 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. An employee also has the full benefit of things like workers’ compensation, severance package, and specialized training.
An employee basically has a schedule strictly ordered and monitored by the employer. As an employee, you can find this disadvantageous or advantageous, check it out!. You may find the tight schedule limiting, or you can use it to your own advantage and be more productive.
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. As an independent contractor, you have full responsibility for your tax documents, and this can be overwhelming.
You must know that as per the internal revenue service laws, an independent contractor falls as a self-employed individual, checks this service. Regarding independent contractors, you are not consistently paid, but you can be sure of the payment once the job is completed. You have the assurance of getting the full amount so long as the work is approved.
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 closing, for anyone starting a business or joining any company, make sure you spend time weighing the advantages and disadvantages of an employee and independent contractor so that you make a suitable choice.