What Makes an Employee Vary from an Independent Contractor
There are two different types of workers, one being an employee and the other being an independent contractor. As a young entrepreneur thinking of your own business, you may not be in a place to know this information. Note that the two types of workers have differences that you should know of. Besides differences, examine the advantages and disadvantages of each type. Continue reading to discover how employees differ from independent contractors, click here! .
To start with, one of the best ways you can differentiate the two types of workers is by looking at their 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 other side is that employees are given payroll taxes, and that is a demerit.
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. As an employee to get to gain more advantages such as the severance package, workers compensation, and special training.
An employee basically has a schedule strictly ordered and monitored 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.
When it comes to an independent contractor, the advantage is that you have more freedom and, therefore, a great choice if freedom is among your priorities. 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.
Take keen consideration that as an independent contractor, you are self-employed according to the international revenue service. As an independent contractor, you will only receive a paycheck once the given project is done. You will get the agreed amount so long as you deliver good work.
As much as the employee has essential benefits like a healthcare plan, an independent contractor does not get to enjoy such benefits. A company may benefit from having an independent contractor, but in this case, as an independent contractor, you will be missing out. In conclusion, before you start a business or join work, ensure you understand the differences so that you can make an informed decision.