What is the difference between an employee and a contractor?
3.2k views |
Last modified 9/29/2020 4:55:11 AM EST |
Added by 123PayStubs Team
When a specific task needs to be performed, an employer can decide whether to hire an employee or a contractor.
An employee is a person who provides services to the business in exchange for a fixed compensation. And so is the employment. Also, you'll have to calculate their withholding taxes using Form W-4 and pay taxes on their behalf. On the other hand, independent contractors, an individual or a company, are hired temporarily for providing certain services and are not part of the company. You need not pay or file taxes on their behalf.
With 123PayStubs, you can accurately calculate the employees' withholdings based on both 2019 and 2020 Form W-4 and add additional earnings and deductions for an employee. For contractors, you can add additional earnings and deductions to their pay stubs.