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 wh

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.