Who Are Employees?

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Before you can know how to treat payments you make for services rendered to you, you must first know the business relationship that exists between you and the person performing those services. The person performing the services may be:

  • An independent contractor
  • A common-law employee
  • A statutory employee
  • A statutory non-employee

An employer must generally withhold income taxes, withhold and pay social security and Medicare taxes, and pay unemployment taxes on wages paid to an employee. An employer does not generally have to withhold or pay any taxes on payment to independent contractors.

Learn about 20 factors that the IRS has identified, that are used as guidelines to determine whether sufficient control is present to establish an employer-employee relationship.

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