We are providing this service to you at our total cost. Pricing: 1099 Independent Contractor - 5% markup of contractor pay rate W-2 Contract Employee - 20% markup of contractor pay rate Why does it cost more for a W-2 contract employee? We operate as the Employer of Record and pay medicare, social security, federal/state taxes, and workers compensation for the Contractor. 1099 Independent Contractor If you hire an Independent Contractor, they get a 1099 tax form. If a worker is classified as a 1099 independent contractor, they are responsible for calculating their own payroll taxes and then submitting the sum to the government on a quarterly basis. Due to increased scrutiny on employment classification, engaging in an agreement directly with an independent contractor is a risky transaction. Hired operates as the agency of record and provides an independent contractor compliance solution that insures the proper classification and mitigates the risk in the contract engagement. W-2 Contract Employee If you hire a contract employee, they will receive a W-2 tax form. Hired operates as the employer of record and mitigates employment risk from our clients. W-2 contract employee payroll taxes are automatically deducted from their paycheck by Hired and then paid to the government. Hired also pays employment costs such as medicare, social security, federal/state taxes, and workers compensation. How to determine Employment Classification In order to classify the worker as a 1099 Independent Contractor, your company must be able to answer "Yes" to the following questions on the Independent Contractor survey that Hired will provide:
  1. The individual has been and will continue to be free from control or direction over the performance of their service.
  2. The individual is customarily engaged in an independently established trade, occupation, profession or business.
  3. The service is either outside of the usual course of the business for which such service is performed, or such service is performed outside of the client business location.
Hired's goal is to provide services that are conducive to either type of employment and foster an easy, successful and risk free engagement throughout and after the duration of the contract.