There are significant differences to being an employee or a contractor. The end result is whether you receive a paycheck with taxes taken out and a w-2 at year end, or whether you are paid a total amount and are responsible for your own taxes and receive a 1099 at year end.
It is important to be classified correctly as the penalties can be significant for a business to improperly classify a worker as a contractor.
There are 3 categories that are used to determine the worker's independence and control.
1) Who controls what and how the worker performs the job.
2) The financial relationship of the company to the worker including manner of billing for time or work, timing of payment, who pays for tools and supplies, etc.
3) The character of the work relationship including contract time or project, benefits, type of service provided compared to the nature of the business.
If you set your own schedule, rates, buy your own supplies and perform the same job for many different clients you are likely to be a contractor.
If the company sets your schedule, rate, gives you directions, and supplies, you are likely to be an employee.
For further information here is the link to the IRS guidance on independent contractor vs employee.
If you think you may be incorrectly classified at work you need to address this issue with your employer.
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