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Key Distinctions Between an Employee and an Independent Contractor

There are two different types of workers, one being an employee and the other being an independent contractor. When you want to start a business, you may not be in the know. Note that the two types of workers have differences that you should know of. It is also your responsibility to analyze the cons and pros of the two types of works, click here for info. Continue reading to discover how employees differ from independent contractors, click here! .

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.

As compared to an independent contractor, an employee is paid a consistent wage. The employees are also considered as the permanent assets of the company, and in most cases, they will receive benefits such as the healthcare plan. Among the packages that they enjoy include; specialized training, severance package, and workers’ compensation.

When it comes to employees, there is always has a strict work schedule dictated by the employer. While the statement seems disadvantageous, it also has benefits depending on the employee, check this site. The set schedule may be limiting you in many ways; however, know that through that, you can 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. 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.

You must know that as per the internal revenue service laws, an independent contractor falls as a self-employed individual, checks this service. As an independent contractor, you will only receive a paycheck once the given project is done. So long as the work is done as per the required standards, you are always sure of getting paid.

As contrary to an employee, an independent contractor will not get some benefits like healthcare, view here for more. In the case that you own a company, you may benefit from this fact, but when you want to join a workforce, it may be a limitation, especially if you don’t have a healthcare plan. To sum up, as an entrepreneur thinking of s starting a business or someone looking forward to joining a workforce, make sure you have a clear understanding and differences between the two types of workers.

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