Putting together teams for your small business can be challenging. Although you may want to hire full-time employees, you might be better off hiring contract employees for specific projects. In addition to gaining specialized skills, you may save money by not having to pay payroll taxes, provide benefits or cover equipment and supply costs.
Here are four benefits of choosing a contract employee instead of a full-time employee.
Contract employees provide services for you and work independently. Although they typically earn more per hour or project, they also report and pay all federal, state, and local taxes on their earnings. Plus, contract employees aren’t provided benefits, which saves you money.
In contrast, full-time employees are part of your company. Although they typically earn less per hour, they pay only part of the federal, state, and local taxes on the money you pay them. Plus, full-time employees receive benefits, which costs you money. In many cases, because of the tax savings and lack of benefits, you pay less when hiring contractors rather than full-time employees.
Equipment and Supplies
Contract employees agree to provide services within certain parameters. As a result, they provide all the necessary equipment and supplies. On the other hand, full-time employees perform work where, when, and how you would like. As a result, you provide all the necessary equipment and supplies. Since contract employees provide their equipment and supplies, you save money by not having to.
Flexible Work Schedules
By law, contract employees set their own work hours. Many work non–traditional hours, including weekends. However, full-time employees typically need to work during a set time Monday through Friday. Although they may have flexibility in creating their weekly schedule, full-time employees usually cannot work weekends. As a result, you may be able to get a project completed in less time by hiring contractors rather than full-time employees.
Contract employees are typically hired to fill a specific need for a short-term project requiring hard-to-find talent. They’re paid for their services during the length of time needed, then can move on to another project. Comparatively, full-time employees are hired to complete long-term work. Although they may have specialized skills, they typically apply to a full-time position rather than a specific project. Full-time employees remain on the payroll, costing wages or salaries and benefits all year. Due to the specialized skills contract employees possess, and the limited time you need to pay them for, you benefit more from having them complete specific projects than you would by hiring full-time employees.