Should You Hire an Employee or an Independent Contractor?

Last week we discussed how to determine if it is the right time to hire help. This week we will help you determine if you should hire an employee or an independent contractor.

There are benefits to both.  There are several factors to consider:


Type of work you plan to hire out:

  • If the office needs organization and the handling of phones or other interruptions, an employee is the better way to go.
  • If you need help with marketing or bookkeeping, what areas are you willing to hand off will help determine if an independent contractor would be better.

REMEMBER that an independent contractor is someone who performs the work with minimal direction and carries the risk should the work not be performed on a timely and accurate basis. Having an agreement in place that outlines the work to be done along with billing specifications will help define the relationship.  Independent contractors need to fill out a W9 form to go along with the agreement.


How much money do you have for wages:


  • Carefully review your budget and profit line.
  • Look over your expenses and determine what cuts can be made.
  • Consider if the advantages and refocus of your time will add sales and income to your current profit.
  • Next, work up a cash flow and needs review.
  • When figuring wages, don’t forget to add in taxes and workers compensation insurance. Taxes will add around 12%. Workers compensation plus other benefit costs are determined by the type of work.


Do you need some additional insight on whether to hire an employee or an independent contractor? Contact me at (715) 379-0116 or email me at You can also connect with me on Facebook or LinkedIn.


Jennifer Thompson
(715) 559-4664

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