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. The main advantage that an employee has is that the employer takes care of the brunt of paperwork related to taxes. On the other side is that employees are given payroll taxes, and that is a demerit.
Another difference between an employee and an independent contractor is that the employee is given a consistent salary. 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.
When it comes to employees, there is always has a strict work schedule dictated by the employer. As an employee, you can find this disadvantageous or advantageous, check it out!. 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. As an independent contractor, you have full responsibility for your tax documents, and this can be overwhelming.
Note that an independent contractor is considered self-employed by the internal revenue services. 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.
The difference between an independent contractor and an employee is that the independent contractor is not entitled to benefits like the healthcare plan. 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.