Independent Contractor?Copyright © Kerry Thomson
lawn chair millionaire Work at Home as an Independent Contractor or Employee
In the work at home job market there are two different options of status. A person can either be an employee or an independent contractor. The two are very different and understanding them is very important.
As an Employee
An employee is the type of working status that most people are familiar with. In general, most jobs outside the home are employee positions. An employee works exclusively for the company. The company pays taxes on their behalf and withholds taxes form their paycheck. The person enters into an agreement to work for a certain amount of pay and usually for specified work hours.
As an employee a person is entitled to benefits. They may get health insurance, paid days off, vacation time and other perks from the company. They also qualify for unemployment through the government and workers compensation due to injury on the job.
An employee position in the work at home job market is something rare. There are opportunities, but mostly the work at home jobs are for independent contractors.
As an Independent Contractor
An independent contractor works for no one but themselves. An independent contractor simply makes an agreement to work for the company, but is not an exclusive member of the company or otherwise indebted to the company. Usually the work agreement is for a set amount or set time period and the pay is often negotiable. The company dopes not pay taxes nor do they withhold taxes for the independent contractor.
The independent contractor does not get benefits and can not qualify for certain government benefits. Additionally, a company does not have to guarantee work beyond the contract to the independent contractor. They can use the independent contractor only when they need them. However, an independent contractor has more freedom.
When an independent contractor is not in a contract with a company then they are free to work with someone else or to even take time off. They have more control over their time because they are not locked into an everyday agreement. Most work at home jobs are going to fall under the position of an independent contractor.
Why do Work at Home Jobs Tend to be for Independent Contractors?
The reason is that most companies choose to use home workers because it is cheaper. They do not have to pay for a work space for them or the tools and equipment they need to do their job. So, the company doesn’t want to have to be locked into using them all the time or having to pay out benefits. Using independent contractors makes more sense and saves more money.
In many cases there are positions as independent contractors that are like a hybrid of being an employee and independent contractor. These positions offer a set work schedule and pay but have the benefit of freedom and still require a person to pay their own taxes.
When looking for a work at home job a person should not be too stuck on finding a position as an employee. It is best to understand both types of positions so you can be okay with either type.
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