Regarding workers, there are two types; the employee and the independent contractor. Anyone starting a business for the first time may not be aware of the types of workers. Note that the two types of workers have differences that you should know of. Besides differences, examine the advantages and disadvantages of each type. The following paragraphs will highlight the key distinctions between the two types of workers.
In the first place, take keen note that the major difference between the two types of workers is the tax situations they are in, read more here. 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. Any employee is a permanent asset of any business or company, and this makes them eligible for things like a healthcare plan. An employee also has the full benefit of things like workers’ compensation, severance package, and specialized 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!. You may find the tight schedule limiting, or you can use it to your own advantage and be more productive.
As compared to an employee, an independent contractor best suits those that want freedom. 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.
Take keen consideration that as an independent contractor, you are self-employed according to the international revenue service. 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. You have the assurance of getting the full amount so long as the work is approved.
The difference between an independent contractor and an employee is that the independent contractor is not entitled to benefits like the healthcare plan. 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. To sum up, as an entrepreneur thinking of s starting a business or someone looking forward to joining a workforce, make sure you have a clear understanding and differences between the two types of workers.