When considering making the decision between a freelance employee and a full-time employee, what drives the decision of a hiring manager? Is it related to the hiring of a freelancer generally being more cost effective than a full-time employee? Even at a higher hourly rate, employers may anticipate saving 20% to 30% annually with a freelancer. While the salary of these freelancers might be the same, organizations are not required to provide and thus pay for health insurance, retirement and other benefits; making these freelancers a cheaper hiring option. Similarly, taxes are also a significant factor because Medicare and Social Security are not paid by the employer either. That’s not to say there is no tax responsibility for an organization or these freelancers. Freelancers pay their own self-employment tax and employers must provide them with the appropriate tax forms. Managing such complicated matters could be better handled when an organization outsources tax form reporting for these freelancers. If you believe a freelancer could be the right fit for your organization, continue reading on to the resource supported alongside this post to learn more about their hiring process.
Hiring A Freelancer vs. Full-Time Employee this infographic was contributed by Tab Service Company, a provider of comprehensive 1099 irs reporting