Added by on 2012-10-04

Should you hire a contractor or are you better off employing a staff member? Depending on your circumstances, you could be better off hiring a contractor for a particular job rather than employing a staff member.

A contractor can come in to do a particular task and once that task is finished, so too is the contract. Just what constitutes a contractor versus an employee is becoming increasingly hard to work out. As a rough guide, a typical contractor is someone who:

Does a one-off task for a set amount of money

Can delegate the task to others as they choose

Achieves the result in any way they see fit

Uses their own resources to do the job

Carries the financial responsibility if the work is defective

Gets no other benefits from the employer.

By paying per job/contract, it could work out cheaper for you than hiring someone on a part-time basis. You would only get this person in when and if you need her/him.
Be aware though that a contractor relationship must clearly be established according to the guidelines.

Just because you and the contractor believe it is a contractor relationship, the courts might find differently as they look at the intent of the relationship rather than the agreement.

If you are in doubt whether it is a contractor or employee situation, ask your accountant or government employment and labour department for advice as there are legal and taxation issues involved.

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