Guest Blog: What’s the Difference Between an Employee and a Contractor with Elizabeth Broderick

Ok...So you are ready to get help with your business. How do you decide if you need to start looking for a new employee OR an independent contractor? In this post, I’ll outline the differences between the two and give you a few things to think about as you decide which route is best for you.

So what’s the difference between an employee and an independent contractor? In the most basic description, here’s a chart to show you the difference:

Independent contractors are a very popular choice for solopreneurs and small businesses, particularly in the online space.  They can, in a lot of cases, be much easier to handle from an accounting standpoint.  They are also ideal for shorter projects, highly-specialized deliverables, or when the workload is only a few hours or less per week on an ongoing basis.

Employees may be a better fit when you want to be able to dictate how or when somebody works on your business, if you want somebody who is 100% focused on your business and not juggling other clients or projects at the same time, or if you are in growth mode and have a long-term vision that includes consistent individuals working on and in your business. 

Deciding between hiring an employee and a contractor can be a tough but important decision.  Make sure you understand the financial and legal implications of whichever choice you have because misclassifying the type of workers you have in your business can lead to audits, fines, or other expensive, embarrassing, and time-consuming investigations.  

Are you still not sure which direction to go?  Do your research, look at your long-term business vision and plan, and weigh your options. 

Feel free to reach out to your business colleagues, mentors, or people like Tiff or I too!