Employment Contracts Explained

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary responsibility of an independent contractor regarding taxes?

They pay taxes only on their profits
They pay taxes like regular employees
They do not pay taxes
They are responsible for their own tax payments (correct)

Independent contractors are required to pay taxes like employees.

False (B)

What is an independent contractor?

An independent contractor is a self-employed individual who provides services to clients without being an employee.

An independent contractor is not considered an ________ of the company.

<p>employee</p> Signup and view all the answers

Match the following employment terms with their descriptions:

<p>Independent Contractor = Self-employed individual providing services Employee = Works under a contract with benefits Contract of Employment = Agreement outlining employment terms Tax Withholding = Process of deducting taxes from earnings</p> Signup and view all the answers

Flashcards

Contract of Employment

A legal agreement outlining the terms and conditions of work between an employer and employee.

Independent Contractor

A person who works for a company but is not an employee, responsible for their own taxes.

Employee Taxes

Taxes deducted from employee's pay to fund social security and other programs.

Independent Contractor Taxes

Independent contractors responsible for paying their own taxes.

Signup and view all the flashcards

Employment Agreement

Formal legal document binding employer and employee, outlining terms.

Signup and view all the flashcards

Study Notes

Contract of Employment

To distinguish a contract of service from a contract for service, consider:
- Did the employer control the work and performance?
- Is the work an integral part of the employer's business?
- Is the individual in business independently?
- Does the individual provide their own tools and equipment?
- Who is responsible for the worker's taxes and national insurance?
- Is there mutuality of obligation (employer obligated to provide work, and worker free to refuse)?
Independent contractors are not responsible for paying taxes.