Should I Hire Someone as an Employee or Independent Contractor?
The distinction between treating someone as an employee instead of an independent contractor is significant.
For an independent contractor, for example, nothing is withheld from the payments made to the independent contractor for a number of payroll related taxes that would otherwise have been withheld if the payee had been treated as an employee. Within the employer/employee relationship, the employer is liable and responsible for paying for a variety of payroll related taxes such as Social Security and unemployment tax that are avoided by treating the payee as an independent contractor.
