Contraced vs Employee

Written By Paula Slaight

A simple Google search will show you the primary difference between a contractor (independent contractor) and an employee is the degree of control the hiring company has over the work being performed.

  • Feature Independent Contractor (1099)

  • Control Contractor decides methods and schedule to reach the result.

  • Taxes Contractor pays their own self-employment taxes (15.3%).

  • Benefits Generally no company benefits.

  • Tools Provided by the contractor.

  • Reporting Reported on Form 1099-NEC.

  • Payment Flat fee per project or milestone.

  • Feature Employee (W-2)

  • Control Employer directs how, when, and where work is done.

  • Taxes Employer withholds income, Social Security, and Medicare taxes.

  • Benefits Eligible for health insurance, PTO, and 401(k).

  • Tools Provided by the employer.

  • Reporting Reported on Form W-2.

  • Payment Regular salary or hourly wage.

Look at the time and cost advantages an Independent Contractor would provide to your business.

Paula Slaight
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Bookkeeper vs Accountant