Some Things You Should Know Before Becoming an Independent Contractor

In the contemporary business world, you are either an employee or an independent contractor (IC). If you are working in the entertainment industry as an event technician or stagehand for a movie or tv show production, you can be an employee or work as an IC. The definition of an independent contractor is a person who works for a company on a contract basis to complete a particular project or assignment for them. These contracts are usually short term and end when the contractor completes the work.

WHAT IS THE DIFFERENCE BETWEEN AN EMPLOYEE AND AN INDEPENDENT CONTRACTOR?

Companies may ask their employees to sign Independent Contractor Agreements to save money on taxes or to avoid liability. Here are some of the differences between an IC and an employee.

* Taxes

Contractors pay both halves of their medicare and social security taxes. If you are an employee, your employer pays half. When you get paid as an Independent Contractor, you also receive a 1099 form. A 1099 form informs the IRS that you were paid as an IC and therefore responsible for your taxes. Employees get a W-2 form, which ensures that payroll taxes are deducted automatically from their paycheck and paid through the employer.

* Control

As an IC, you have the right to choose when and where you do your job, unlike an employee. The company cannot dictate your hours, and they also cannot tell you where to do your job. If they are supervising your work and you have to ask for permission to take time off, then you are an employee. That noted, ensure that you do not inconvenience other people on the project with you.

* Equipment and Supplies

ICs have to bring their equipment to the job while employees do not. If the company provides you a desk, a computer, and other tools you need for the job, you are an employee.

* Assistants

An IC chooses the people they want to work with. As an IC, you can choose to work alone. If the company selects your assistants, you are an employee.

* Evaluations

When you work as an IC, the company evaluates the product. An employee is evaluated during the work on methods used and the process.

* Financial Control

Employers often reimburse employees who spend their own money on business-related expenses. Independent contractors have to buy their own equipment. Unlike employees, they are likely to report a profit or loss on their paycheck. Remember that as an IC, you only get paid if you finish the work. If you do not complete the work on time, you will not be paid overtime when you work long hours to finish.

* Opportunity to Work Elsewhere

Independent contractors, unlike employees, can advertise and work for other companies. An employee cannot do this. If you have signed an IC Agreement and are not free to work for other people, you are an employee, and you need to talk to your employer about your terms.

* Benefits

As an Independent Contractor, you do not get sick days, vacation time, insurance, or a pension. Employees usually get a benefits package of some sort depending on their employment contract.

THREE ESSENTIAL QUESTIONS TASK BEFORE BECOMING AN INDEPENDENT CONTRACTOR

If you are beginning your career or wish to start working as an independent contractor, here are important questions to ask yourself.

1.WHAT ARE THE ADVANTAGES OF BEING AN INDEPENDENT CONTRACTOR?

When you are an IC, you are self employed and are your own boss. Companies hire you for short periods so you have that sense of freedom that you can move on to a new project after a short time.

2.WHAT DO I LOSE AS AN INDEPENDENT CONTRACTOR?

As an IC, you will not have access to insurance, sick days, vacation time, workers compensation insurance, overtime, and the right to minimum wage.

3.CAN I SELF-MOTIVATE TO FIND BUSINESS AND COMPLETE PROJECTS?

Independent contractors get paid when they complete the clients’ projects. If you cannot motivate yourself to finish and look for new projects becoming an IC may not be the best choice for you.

When working in the entertainment industry as an event technician or stagehand, working as an independent contractor allows you to grow your knowledge as well as your revenue.