Glossary term
What is Independent contractor?
Short answer
An independent contractor is a person who works for themselves and is paid per job, not an employee of your company.
Independent contractor, explained for tree service owners
Some tree companies use contractors for extra climbers or hauling. The law has tests for who counts as a real contractor, and the label alone does not decide it. If the rules say the person is an employee, you may owe payroll tax, workers' comp and more. Using contractors who have their own insurance, tools and customers is safer. Get written agreements and certificates of insurance. This is a short explanation, not legal advice. Ask a tax or legal pro before you decide.
Related terms
- Payroll tax
Payroll tax is the tax withheld from employee pay plus the matching tax the employer pays on wages.
- Form 1099
Form 1099 is a US tax form a business sends to contractors it paid, to report what they earned.
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