What Are the Benefits of an Employee Vs. a Contract Agent?

Employee vs. contract agent.

Contract agents are also known as independent contractors (ICs). ICs are responsible for all aspects of operating a business while completing the work for their clients whereas employees do not have those worries.

Control

Employers have control over how the work is completed; they can implement employee guidelines and process steps. Contract agents determine how the work is completed with or without employer input.

Taxes

Employees automatically have their taxes calculated and removed from their paychecks by the employer. Contract agents are responsible for calculating and sending their taxes to the Internal Revenue Service (IRS).

Paychecks

In lieu of unforeseen circumstances, employees receive a paycheck consistently. On the other hand, contract agents must constantly seek new work opportunities.

Tools

Employees are not responsible for supplying the tools to complete the work (e.g., laptops). Independent contractors must purchase their own tools, such as desks and computers.

Benefits

Companies provide benefits such as 401k plans and insurance to its employees and, occasionally, contribute to the benefits package. Contract agents must research and purchase their retirement plans and health insurance, without assistance from the client.

References

• FindLaw: Twenty Factor Checklist to Determine Independent Contractor vs. Employee Status
• LegalZoom: Employee vs. Independent Contractor: Differences You Need to Know
• Employee issues.com: Independent Contractor vs. Employee

Resources

• U.S. Department of Labor: Fair Labor Standards Act
• IRS.gov: Independent Contractor vs. Employee
• Society for Human Resources Management