Classification Matters : Contractors v. Employees

So, you’ve reached the point in your entrepreneurial journey where you need help to function effectively. You find the perfect candidates, offer them the job, onboard them and they’re ready to get to work...and get paid. This week we discuss the two classifications of people who do work for you - independent contractors and employees. It is in the best interest of the employer to keep as many contractors on their team as they can. Employees tend to be more expensive, as they’re eligible for benefits (health insurance, retirement, stipends, and other perks) in addition to their agreed upon base pay. Even though contractors are easier to pay than employees, you can’t just classify everyone as such simply because it’s less taxing, literally and figuratively. Questions to ask in making the determination:•Does your company control or have the right to control over when and how the worker does the job?⁣⁣• Does the company require that the worker show up to perform the work at a specific site or office location?⁣⁣• Will the worker receive benefits?⁣⁣• Is the work engaged for a specific time period?⁣⁣• Is the worker an individual or a business (including LLCs)?⁣⁣• Can the worker take on other work outside of the work your company is requesting?⁣⁣Need more? Our team has put together a free resource library to save you valuable time and energy in your business! Ready to get started with Quickbooks? Use our referral link. If you're ready to outsource your Accounting and/or Tax prep needs go to www.littlefishaccounting.comFind us online:Instagram:www.instagram.com/littlefishaccountingFacebook: www.facebook.com/littlefishacctgConnect with Keila!LinkedInwww.krht.co