An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when required, during which time he or she may be subject to the Law of Agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.
In the United States, any company or organization engaged in a trade or business that pays more than $600 to an independent contractor in one year is required to report this to the Internal Revenue Service (IRS) as well as to the contractor, using Form 1099-MISC. This form is merely a report of the money paid; independent contractors do not have income taxes withheld from their pay as regular employees do.
Read more about Independent Contractor: Independent Contractor Versus Employee, An Independent Contractor in Tort
Famous quotes containing the word independent:
“Men will say that in supporting their wives, in furnishing them with houses and food and clothes, they are giving the women as much money as they could ever hope to earn by any other profession. I grant it; but between the independent wage-earner and the one who is given his keep for his services is the difference between the free-born and the chattel.”
—Elizabeth M. Gilmer (1861–1951)