Who to Hire for Your Business? Independent Contractor or Employee?

As its name implies an independent contractor does not need to join the office premises to get paid against his services. They can’t be called employees because they don’t work for salaries and don’t offer their expertise to a 9 to 5 job. They may sign a contract with mutual understanding with the employer but not as an employee: as an independent contractor. 

The amount of compensation that is an employee or an independent contractor is getting may be the same, but the technical and legal responsibilities are not the same. A major difference between a contractor and an employee is the taxes. 

For the employees, registered companies withhold income tax, medical insurance, and social security from the salaries paid. On the other hand, for the independent contractor, the company doesn’t withhold any kind of taxes mentioned earlier. Neither employment nor labour laws apply to independent contractors. There are all kinds of online free tax tools that can assist both the employer, employee and independent contractor. Professional help from a tax expert or a CPA is always recommended. 

CocoSign is one of the best e-signing sites that offers a simple independent contractor agreement and other templates. Also, there are no charges for signing up on the website to download a contractor agreement. The degree of control over the employees and independent contractors defines the designation of an individual. 

CocoSign is a world class e-signature brand recognized by many media authorities such as Fox. It has billions of loyal users who are taking benefits of their services. It’s because the signatures of CocoSign are legally valid and are enforced by law. It has been operational in more than 190 countries around the world.

Who to Hire for Your Business? Independent Contractor or Employee?

Differences between an independent contractor and an employee

Starting your business is not that easy as it looks on the Forbes list. The people who made their names in those magazines had suffered a lot behind the scenes. Therefore, whenever you start a business, you’ll automatically seek help. 

Although small business owners start by hiring employees and sometimes permanent employees, they don’t know the major difference. Here are points of differences between an employee and an independent contractor. Hire them based on your needs, not due to referrals. 

Business owners and freelancers

Start with this analogy that the independent contractors are the business owners and freelancers. They usually provide their services and charge per project or hour, depending upon the nature of the work.

Who to Hire for Your Business? Independent Contractor or Employee?

The concept of getting an independent contractor with e-contracts has been revolutionized with CocoSign. Check out more forms for free at CocoSign to seal the deal with other independent business owners and freelancers. Employees are not business owners but they own your business when they get under the employment contract.  

More expertise

A person who has worked with domestic and international partners will always have more skills and expertise than the 9-5 workers of a company. As the independent contractors are entrepreneurs and business owners, they have spent most of their time in managing things on their own. They know how to manage things under tight budgets or circumstances. 

On the other part, employees work as a team and share different ideas to come up with a solution. They make an organization as their second home and work hard for one company at a time. 

B2B professionals

Independent contractors worked directly with other businesses, not with the end-users. They got good links in the market that led them to grab more business from the company without making deep cuts to the company’s pockets. They’re professionals and also work with more than one organization of the contrasting nature.

If trained, employees can grab good sales for the business as well. But it’ll cost you their salaries, training expenses, and then there is no security that after getting all these perks, he/she won’t fly away to other organizations. 

Working hours

An independent contractor is only abiding by the law but not by the time. You can’t force him to work eight hours a day and five days a week. It’s up to his will and you can’t do anything. It clearly says that you owe his services not time. He can complete your whole month’s target within a week, you never know. 

If we talk about an employee, he/she is bound to come to the office before 9 O’Clock and leave after 6. He is bound by the law to follow the same pattern for 365 days of the year. He’ll work eight hours a day in or out of the office and the results will be on the table after one month. 


This is a new concept that has been introduced by the freelancers and the independent contractors over the last two decades. As their plates grow, they outsource their work to meet the deadlines. They may hire employees for less salaries and outsource your project by keeping their cuts from the bid. 

Consequently, an employee can’t hire another person to do his part of the job as he only has one source of income. He’ll perform all the duties by himself because you’ve hired him to utilize his/her expertise. 


We have mentioned a few key points that will guide you in choosing between employees and independent contractors. At the end of the day, whatever choice you make, consider these points of differences for better results. Also, download free independent contractor agreements and employee agreements from CocoSign. 


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