independent contractor

Starting a new business puts you in a position where you need help externally. You require the services of a contractor, especially when starting a small business. However, businesses grow fast, and when you start thinking of hiring to help out with the company. This article explores whether you should hire an independent contractor or an employee for short-term projects.

Paying Employees vs Independent Contractors: Paystubs And More

A business owner hires a paid employee to execute a specific task within the firm. An employee works under instructions from seniors – a manager within the company, for example. An employer hires an employee if only they prove that their interests and expertise suit the company.


As a business owner, hiring an employee gives you total control. You direct how they work during working hours and even train them to meet the company’s expectations. Employer control comes with a package of loyalty from an employee – they can only work for you.

You also have more freedom in assigning jobs to the employee. Additionally, you can fire the employee with no attachments to a paying contract. However, the government –federal and state – governs employees’ welfare regarding wages and general working conditions.

As an employer, you must be in full compliance with payroll tax regulations. Some of the stipulations under these regulations include paying half of your employee’s Social Security and medical insurance. You get the other half from the employee’s wages.

Pay stubs make it easy to maneuver all tax hurdles. A paystub generator keeps all tax records from an employer to an employee. Most employees want to understand deductions, withholding, and gross wages they earn. In turn, it helps them when applying for a loan or other financial services that require a good grasp of their income.

For insurance, a business pays for unemployment and employee compensation insurance.

Independent Contractor

An independent contractor works independently and executes particular tasks given by the company. They work on a contractual basis, either on a long-term or short-term basis. But, they are not on the business’s payroll, and they have the freedom to work for several firms simultaneously.

Hiring an independent contractor gives your business flexibility and saves you money. You only hire a contractor when the situation demands so, unlike with permanent employees. You also don’t have to pay extras like medical and insurance cover like hiring an employee. You get a workforce temporarily, which is cost-effective, you can get sure by yourself, after considering the cost of hiring a software developer.

A contractor helps you maneuver market competition because you hire the best to keep your company competitive. Liability is also deficient when working with an independent contractor, unlike with hiring an employee. Avenues exposing a business to liabilities do not exist because you do not pay for insurance covers. You don’t also pay a minimum wage, wrongful termination, or discrimination while at work.

Further, there is more efficiency at work because a contractor has specialized skills to deliver to the maximum.

On the flip side, an employer has no control over a contractor. They cannot dictate how a job is done. An employer only specifies the position and a deadline; the rest is the contractor’s execution.

Secondly, they can work for multiple firms while still working for you. And they provide their work tools.

In case of injuries sustained while on the job; contract workers need to have their own insurance. It opens a legal liability since a contract worker can sue their employer for compensation for injuries sustained at work. 

Growing your business requires the support of employees and contractors. From the above findings, having an employee is more costly and has more disadvantages. Hiring an independent contractor is a sound choice for handling a short-term project because there are minimal challenges.

Photo by Sora Shimazaki from Pexels