You are taking on new business and you are ready for some changes. You set aside time to properly evaluate past projects and new opportunities. After looking it all over you quickly determine you need extra hands on deck to get the job done. Do you hire new team-player employees or do you look for a talented contractor? Let’s see what is best suited for you.
An employee is technically controlled by the employer – managing what they do, how they do it, when they do it.
An independent contractor may be told what project is needed and when it’s due, but generally he or she is in control of the way they go about it.
Distinguishing amongst the two is simple enough, but what exactly are the pros and cons of hiring an employee or finding an independent contractor?
When You Hire Employees:
Hourly wage is usually less
If you need extra help, employees are routinely available 30+ hours per week
Projects are assigned permanently
Less training is involved since they are fixed rather than fleeting
Benefits are usually offered
Payment is scheduled consistently
Increase in payroll paperwork for different pay schedules and tax responsibilities
Employers cover employee licensing
When You Hire Independent Contractors:
Overall cost can be less
More flexibility – if the final product is not ideal, hire a new contractor
You have options- match the assignment with the contractor’s talents
They handle their own licensing and permits
You have less control
Their time is their own, so they can say “no” to a project
No sense of loyalty, not a part of the team
Copyrights are owned by the contractor
Whether you hire a new employee or an independent contractor, make sure you weigh the pros and cons heavily before you take action. In addition, be sure to report the individuals correctly, since penalties come at a hefty price when the lines get crossed.
One System to House It All
Whether you are hiring individuals or outsourcing to contractors, we have the payroll technology to offer the correct reporting whether for 1099’s or W-2s, so that when you come to tax season you are fully prepared.
If you are looking to streamline your administrative and payroll tasks, we are well versed in everything related to full-time employee reporting, contractor reporting, payroll streamlining, compliance and more.
Learn more about our online payroll solution today.