subject: Contractor Vs. Employee: Which Would You Prefer? [print this page] In supervising a business, which has jobs that are mostly technical, you definitely have to consider on hiring full time staff or just freelancers to do most of the tasks. I myself have experienced its advantages and disadvantages, that's why I am sharing these 3 issues which I usually look upon when deciding among them.
Firstly, does the company have routinely numerous quantity of work for the employee to do? If it does, then it is but wise to hire an employee who can work full time. For the main reason that most free lancers are paid twice the hourly rate of a full time worker. It is much preferable to hire someone who works on a regular basis, than spending excessively on a freelancer.
The employee benefits should be given apt concern. It can be very costly on the employer's part to pay for health insurance and other insurance for unemployment. If poor types of insurance are purchased for your technical employees, you will surely have problems on claiming them once one of your staff encountered any injury during their duty. This may even lead to bankruptcy if the injuries are very serious.
Secondly, will I provide all the needed tools and equipment for the work? Most freelancers will have already their own source of tools and equipments for the task. You can let them do the job for lesser number of projects, and the payments will be made after the projects are done.
Thirdly, what will be the cost of tax fee for every employee as compared to a contractor? Once your employee is a part timer, his compensation is actually an expense for the company. Upon computing of taxes, his salaries will be deducted from your income that will in turn lower your taxes. For full time workers, additional taxes will be paid from his compensation. Calculate which will cost less in terms of taxes.
Having these 3 considerations, you will be properly guided on choosing a full time or part time employee as a staff. You accountant and your human resource personnel must be coordinated to discuss these matters clearly for the best decision to make.
