What is one key feature of an independent contractor?

An independent contractor is characterized primarily by their liability for their own expenses and taxes. This distinction is crucial, as independent contractors operate as self-employed individuals rather than employees of a company. As such, they must manage their own business-related expenses, including costs for materials, equipment, and other resources necessary to perform their work. Additionally, they are responsible for the payment of their own taxes, which includes income tax and self-employment tax, unlike employees whose taxes are often withheld and managed by their employer.

This understanding of liability is central to the relationship between independent contractors and businesses that hire them. The contractor retains autonomy in how they complete their work, which includes financial responsibilities, further differentiating them from traditional employees who typically do not bear such direct costs.

In contrast, employees generally receive employee benefits from their employer, are supervised and managed by the company, and often have the employer assume certain liabilities and responsibilities within the employment framework. Additionally, the concept of exemption from legal responsibilities does not apply to independent contractors in the same way. They are still subject to legal obligations associated with their work, differentiating them from employees in that regard as well.