For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. What is an employee vs. For the independent contractor, the company does not withhold taxes. See full list on acf. Independent contractors are generally engaged to perform operations not within the usual trade or business of the principal and such tasks are contract-specific.
These specialists usually take on larger projects for longer-term clients.
As a contractor, you might work on-site in a client’s office or in your own workspace, and you may accept clients through an agency. The independent contractor vs. Most of the time, it’s easy to discern an independent contractor from an employee. A contractor is employed to build a home for someone. The contractor is the one who is actually responsible for seeing that the home is built.
This difference is significant for two types of businesses. The first is a business that may hire independent contractors or employees. The other is a self-employed businessperson who may be an independent contractor.