How to classify workers as employees or independent contractors

Should you classify your workers as employees or independent contractors? This article provides information on the distinction between the two.

Employee Versus Independent Contractor

Independent Contractors

If the person works for you as an independent contractor, you should set up that person as a supplier. The general tax rule is that an individual is an independent contractor if you have the right to control or direct the result of the work but not the means and methods of accomplishing the result.

Employees

If the person works for you as an employee, according to tax rules, set up that person as an employee.

If you are not sure on how to classify your workers, consult your accountant.Still not sure?