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“Finding a contractor is a lot like online dating - you don't know a lot about the person before meeting them but you expect a lot out of the relationship! ” - Bryan Bauemler
Independent contractors are self-employed individuals who provide services on a contract basis. They manage their own time, projects, taxes, and can work for a variety of businesses. Independent contractors are especially helpful when you need assistance for particular projects or on a temporary basis.
Here's the low-down on independent contractors:
Independent contractors are individuals who are hired by you to do something for you but aren’t considered employees of your company. Independent contractors are responsible for their own businesses, paying their own taxes, and having their own business insurance to cover their business activities. Unlike employees, independent contractors have more flexibility in setting their own hours, choosing their projects, and working for multiple clients simultaneously.
When we’re building our businesses, there are going to be times when we need to hire someone to help us, but we’re not necessarily going to be hiring that person full time in our business. This is when it’s a good idea to hire an independent contractor. This arrangement allows businesses to access specialized skills on a temporary basis without the commitment of hiring someone as a full-time employee. Independent contractors often work in various industries, including freelance writing, graphic design, consulting, and more.
Some examples of independent contractor relationships are:
· Hiring someone to design your logo
· Hiring someone to do your bookkeeping
· Hiring someone to design your website
· Hiring someone as a remote part-time virtual assistant
A contract between you and the contractor is a way to protect both of you with regards to the rights and responsibilities of each of you. By having everything written down, you bring clarity to the relationship as to what is supposed to happen and when and lessens the risk of there being disputes. Additionally, you will lessen the risk of the contractor being considered a W2 employee. The contract should explicitly state the relationship and how taxes will be paid by each respective party as well.
You will want to sign an Independent Contractor Agreement with the person that you hire. The Independent Contractor Agreement will have certain provisions in the contract that state things like:
· what services they will provide
· how and when you will pay for those services
· how you will share confidential information
· if you are licensing intellectual property (copyrights, trademarks)
· how and when the relationship ends
The agreement will give you an outline of the relationship and the rights and responsibilities you both have to each other. It’s a good idea to go over the agreement with your contractor so you are both on the same page and agree to the terms of the agreement.
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