Hiring employees allows you to build a consistent team but comes with added responsibilities like payroll taxes, benefits, and compliance with labor laws.
However, wages paid to employees are tax-deductible, and you may qualify for certain employment tax credits, like the Work Opportunity Tax Credit (WOTC).
Independent contractors, on the other hand, provide flexibility and typically cost less upfront since you’re not responsible for employment taxes or benefits. Payments to contractors are also deductible, but misclassifying workers can lead to IRS penalties and back taxes.
Carefully evaluate your long-term business needs. If stability and control are priorities, employees may be the better choice and using an online payroll services can help you with this. If you need short-term or specialized help, contractors might be more cost-effective.
