The difference between an independent contractor and a company employee also falls within labor laws and tax laws.įor example, there is no workers’ compensation available for independent contractors.Ī company will withhold income tax, Social Security, and Medicare for an employed worker.įor an independent contractor, the company does not withhold tax.
Instead, they provide the company with services until the company no longer needs their services.Īn employee, on the other hand, is long-term, on an entity’s payroll, and is not hired for specific reasons. Technically, independent contractors are not employed by the company they work for. There are several fundamental differences between working as an independent contractor for a company and an employee. Related: Are Uber drivers independent contractors or employees?
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