Differences Between Employee and 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. 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.
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. The only problem is that the employees are given payroll taxes, learn more.
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. 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. This can be a good or a bad thing depending on an individual, discover more. You may find the tight schedule limiting, or you can use it to your own advantage and 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. Freedom maybe the advantage, but the disadvantage is that you will have more responsibility as an independent contractor. 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. 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. 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. 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.