When filling a role in your company, there are many decisions to make. Not only do you want to find the right candidate to complete the job, but you want to ensure that you hire them under the best category to fit your business needs.
Choosing to hire an independent contractor or an employee is a significant decision since today more, and more companies choose to bring on independent contractors – and for a good reason.
There are pros and cons to this decision.
Let’s explore them below.
What is an independent contractor
Independent contractors are self-employed workers.
When hiring them, you have the right to control and direct the result of their work, but no legal rights to demand what will be done or how it will be done.
You won’t serve the role of their boss – even if you hire them for ongoing work for your company.
Also, compensation paid to independent contractors is subject to self-employment tax. This is unlike hiring an employee in which you are responsible for covering various costs, including income tax withholding and FICA (Social Security tax and Medicare).
Independent contractor vs employee
While an independent contractor and employee can complete the same duties, there are key differences between the two that you want to consider when making your decision.
Pros of hiring independent contractors
Here are some of the many advantages associated with hiring independent contractors.
You might save money
While you might pay your independent contractors more per hour or per project, you will likely save in the end since you don’t have to pay employer-provided benefits, have office space available, provide equipment, and the like.
The benefits paid to employees can increase your payroll costs by 30% or more.
You face fewer legal problems
Usually, you will reduce your