From the outside looking in, it might be easy to assume that any employee reporting to a company would be a full-time one. The truth is that most companies, whether large or small, consider every hiring opportunity that comes their way. Meaning, just because an employee is an employee, doesn’t mean they’re a full-time one. Instead, they might be a freelancer. Freelancers help organizations complete projects to meet deadlines but are often outsourced. These hires are typically for short-term tasks, like designing a company logo, providing insightful copy on a subject outside of a company’s typical wheelhouse, or for financial assistance. Organizations look to freelancers in these opportunities for many reasons, but one of the primary reasons behind hiring a freelancer are the reduced costs to do so. Hiring a freelancer will, generally, be more cost effective than hiring a full-time employee because organizations are not responsible for paying out health insurance, retirement and other benefits to these individuals. Similarly, when it comes to taxes, organizations benefit as a result of freelancers as well. Medicare and Social Security are not paid by the employer, meaning tax responsibility is very low for these freelancers. Though there are many cost benefits to hiring a freelancer, organizations must also weigh out some of the potential cons associated with freelancers as well. To better discern some of those disadvantages, be sure to review the infographic accompanying this post.
Hiring A Freelancer vs. Full-Time Employee this infographic was contributed by Tab Service Company, a provider of a premier 1099 e-file service