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I think an awful lot of employers would prefer you were a contractor; in the USA at least, it is the IRS/government that prevents this from happening more by pu

by ejb999 4y ago

I think an awful lot of employers would prefer you were a contractor; in the USA at least, it is the IRS/government that prevents this from happening more by putting the fear into said employers that they will be fined and forced to pay back taxes for anyone improperly classifying people as contractors when they are in fact employees.

Tangurena2 4y ago
It was the tax reform act of 1986 that removed the "safe harbor" provision for engineers and computer professionals. In the city where I currently live, lots of small businesses try to claim that their employees are contractors. Those businesses depend on the ignorance of their workers.
vladvasiliu 4y ago
Are contractors taxed less than companies in the US? In France, companies also like to contract out a lot, either to "freelance" or regular outsourcing shops. The reason I put freelance in quotes is that there's no such thing here, legally. You have to have some form of company, through which you invoice the client. But then, whenever you want to get the money out of the company to pay rent and eat, you'll be hit by, more or less, the same taxes the employer would pay. For a given unit of work, it's not cheaper to contract out, there's no real tax loophole. As far as I know, the state doesn't really care. It may even prefer it, since contractor rates are usually higher than salaries, so they get to get more tax. The only situation where it would crack down on this is if the would-be employee complained. Since this is considered a "precarious" arrangement, if the contractor can prove that they're basically an outsourced employee, they can ask to be converted to an actual employee and the state will back them up.
- jjeaff 4y ago
  Contractors are taxed at a higher rate, or really, the same rate, but in an employee situation, the employer must pay half of the tax. However, depending on what you do, people can end up paying less in taxes overall as a contractor because you have more flexibility for deductions. There are very little options for an employee to deduct any expenses in the US, whereas, a contractor could potentially deduct the cost to commute to an office, their cellphone and home internet (if used for work) and even a portion of their rent/mortgage for a home office.
CalRobert 4y ago
Incidentally I like this because it makes it easy for American companies to give me money (I do not live in the US). Though I also have to give an accountant more money to deal with SS/public pension contributions and US/Irish totalization agreements.

by ejb999 4y ago

Tangurena2 4y ago

It was the tax reform act of 1986 that removed the "safe harbor" provision for engineers and computer professionals. In the city where I currently live, lots of small businesses try to claim that their employees are contractors. Those businesses depend on the ignorance of their workers.

vladvasiliu 4y ago

Are contractors taxed less than companies in the US? In France, companies also like to contract out a lot, either to "freelance" or regular outsourcing shops. The reason I put freelance in quotes is that there's no such thing here, legally. You have to have some form of company, through which you invoice the client. But then, whenever you want to get the money out of the company to pay rent and eat, you'll be hit by, more or less, the same taxes the employer would pay. For a given unit of work, it's not cheaper to contract out, there's no real tax loophole. As far as I know, the state doesn't really care. It may even prefer it, since contractor rates are usually higher than salaries, so they get to get more tax. The only situation where it would crack down on this is if the would-be employee complained. Since this is considered a "precarious" arrangement, if the contractor can prove that they're basically an outsourced employee, they can ask to be converted to an actual employee and the state will back them up.

jjeaff 4y ago
Contractors are taxed at a higher rate, or really, the same rate, but in an employee situation, the employer must pay half of the tax. However, depending on what you do, people can end up paying less in taxes overall as a contractor because you have more flexibility for deductions. There are very little options for an employee to deduct any expenses in the US, whereas, a contractor could potentially deduct the cost to commute to an office, their cellphone and home internet (if used for work) and even a portion of their rent/mortgage for a home office.

CalRobert 4y ago

Incidentally I like this because it makes it easy for American companies to give me money (I do not live in the US). Though I also have to give an accountant more money to deal with SS/public pension contributions and US/Irish totalization agreements.