Skip to main content

Classify Your Workers

Is your worker an Independent Contractor or an Employee?

Factors that the IRS considers while determining the classification of US workers:
Companies in the past have paid millions in penalties for misclassifying workers! Don’t be caught in the same trap. Quickly check your potential worker classification according to the IRS guidelines with our easy questionnaire, which will help you identify potential risks in your business.
Note: The information provided is for general informational purposes only and does not constitute legal advice. You may contact the IRS to verify classification by filing Form S-8.
Discover the Difference

Independent Contractors vs Employee

According to IRS a business might pay an independent contractor and an employee for similar work, but there are key differences between the two.
Contractors Employees

Employment Status

Works for a Company

Working Hours 

Fixed set of hours as per contract/ company policies

Tax Responsibility 

Responsible for their own taxes, based on the structure they work through 

Company withholds taxes (income, NI, pension, etc.)

Employment Rights

Not eligible
Most likely eligible

Number of clients 

May have multiple clients, most likely not at once

Generally, work for a single company at a time 


Why Should You Avoid Misclassifying Workers?

Here’s a list of issues faced by business owners/ employers that can result from misclassifying workers:

Did You Know?

At least 10% to 30% of audited employers misclassify their employees as independent contractors in the U.S. alone.

Employers, Ready to Find Out Your Worker Classification?

Employment tax obligations
Ready for the next step?

Once a determination is made, the next step is filing the appropriate forms and paying the associated taxes. 

Have Doubts About Our Questionnaire?
How to use this Tax1099’s Worker Classification questionnaire?

There are a series of 13 questions to help you determine your worker’s classification. All questions are required to be answered to get the result.

For whom is this questionnaire designed?

This questionnaire is primarily designed for all the employers who want to identify whether their workers are independent contractors or employees. Please note that it is set according to IRS guidelines for classifying workers residing in the USA and does not cover any US Department of Labor or the regulations required by any State agency.

How does the worker classification determine whether a worker is an employee or an independent contractor?

The analyzer evaluates factors such as behavioral control, financial control, and the type of relationship between the employer and the worker, aligning with IRS guidelines.