Hughey's Debits & Credits: Bookkeeping. Payroll. Taxes.

All posts tagged contractor

Employee or Contractor?

One of the largest expenses in your nonprofit is payroll and all that goes with it. In addition to payroll, you also have to pay payroll taxes, unemployment, leave, insurance benefits, and training.

On more than one occasion, a client has wanted to switch an employee to an independent contractor in order to save money. However, that decision is not mine or even yours to make. The Internal Revenue Service (IRS) determines the difference here in a more extensive definition while the Department of Labor only uses 6 determining factors here.

Like my clients, I am sure you do not have time to research the difference or read the monstrous qualifications detailed by the IRS. Therefore, I am going to give you my version of the difference in these top 3 points: Read more