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. If you are thinking of venturing into a business, you should know that there are distinctions between employees and independent contractors. Apart from variances, see to it that you know the benefits and demerits of an independent contractor and employee, click this website. Continue reading to discover how employees differ from independent contractors, click here! .
In the first place, take keen note that the major difference between the two types of workers is the tax situations they are in, read more here. With an employee, the benefit comes in place by the fact that the employer handles the brunt of tax-related documents. On the other side is that employees are given payroll taxes, and that is a demerit.
An employee differs from an independent contractor in that an employee I was given 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.
More often, an employee is subjected to a tight work schedule suggested by the employer. This can be a good or a bad thing depending on an individual, discover more. 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. Despite the freedom, the challenge is that being an independent contractor requires more responsibility. The stress kicks in when you are fully responsible for your tax paperwork, view here.
Note that an independent contractor is considered self-employed by the internal revenue services. Regarding independent contractors, you are not consistently paid, but you can be sure of the payment once the job is completed. So long as the work is done as per the required standards, you are always sure of getting paid.
As much as the employee has essential benefits like a healthcare plan, an independent contractor does not get to enjoy such benefits. 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.