Independent Contractor vs Employee

id : 109 Payroll Tax   
posted by : Admin
 DOQ : 2021-04-07 16:41:05

John Muiruri
Reviewed April 06, 2021

The difference between being an independent contractor or an employee can have an impact on your income tax, particularly if you think you're a contractor but the Revenue authority decides that you're not after you've already filed several tax returns.

Specific criteria may be used to determine your status and you can take steps to protect your status as an independent contractor if you understand them and how to implement them.

The biggest tax advantage for an independent contractor is the potential for tax deductions that aren't available to employees. A self-employed person can generally deduct all reasonable business expenses.

Employers Love to Hire Independent Contractors from a business's perspective, hiring a contractor is much preferred to hiring an employee because means a lot less paperwork and responsibility.

Contractors don’t receive benefits packages or pensions. They must pay their own NSSF and NHIF contributions. Businesses don't have to provide them with

- health insurance,
- life insurance, and
- other common employee benefits.

A company that uses an independent contractor doesn't have to do payroll, which involves PAYE and paying pension or gratuity.

It's assumed that a contractor is proficient at the service being provided and therefore doesn't require paid training.

You may also like...


By John Muiruri Reviewed April 06, 2021 The difference between being an independent contractor


The Kenya Revenue Authority (KRA) on Monday suffered a blow after the High Court sitting in Nairobi
Court case: Treasury agreements aiding the rich evade paying taxes This claim is contained in a cou



KRA to collect Sh10bn more after raising tax. The government expects to collect an additional Sh10



Goods can be stored in a Custom Bonded Warehouse up to nine months without having to pay VAT or othe



Tax Laws (Amendment) Act 2020 (the Act) was assented to by the President on 25/05/2020. Key chang

more comments


This article focuses on what independent contractors must do so as to differentiate their work from the employees. This saves the contracting business the headache of Employee taxes among other employee-related issues.
 votesDOWN : 0    votesUP : 0
: Kimani  DOA   2021-04-27 15:36:30

my Views
(0) @2014-2023 All rights reserved
Powered by :