Employees vs. Subcontractors

 

Distinguishing the difference between an employee and a subcontractor may seem like a grey area to some business owners. Here is an explanation that should help clarify the difference between the two. If you hire a worker and tell him what tasks he must complete and give him the tools to do so, then he is an employee. If you hire someone to work for you, but he comes and goes at a time he determines and brings his own tools, then he is called a subcontractor.

 

Employee Example:

Mary is hired to answer the phones at your business. She only works a few hours a week, but she arrives to work at a time that you tell her to. When she is at work, the tasks she completes are dependent upon your instructions and you provide her with the tools she needs in order to complete those tasks.

 

Subcontractor Example:

Dave is hired as tech support for your business. He shows up at a time that works best according to his schedule, as you are not his only client. He brings his own tools to use while he works and he hires his own employees to help him manage his tech support business.

 

 

There is a common misconception between the two, so I hope that helped to clear up any confusion. If you have any additional questions or would like to set up an appointment, contact us today.

 

 

Tiffany Goodin,

AccountingByTheBooksNC.com