Your company employs independent contractors, but you aren’t sure if you need to provide pay stubs for them. And you don’t want to go through the process of generating an independent contractor pay stub if it’s not something that is actually necessary.
Plus, if it is necessary, you need to know how to get them created. Don’t worry – I’ve got you covered. In this post, I go over everything you need to know about pay stubs for independent contractors. So you’ll be
able to sort that out and get back to running your business!
Sound
interesting? Keep reading to find out more.
Why Pay Stubs Are Important
Pay stubs,
or at least some record of payment, are crucial to employees. And they
are just as important for anyone who does work for your company. So that
includes independent contractors and
consultants.
For starters, it’s the only standardized means for people to show proof that they were paid for work performed. And it’s
also a record of all the payments you might have made towards taxes and
assorted other deductions.
Employment vs. Independent Contractor
It’s also
important to distinguish between an independent contractor and an
employee. Your
employees are people who have to work a set number of hours, and those are
typically assigned hours. Their taxes are deducted from their paychecks, they
have work assigned by superiors, and they generally only work for your company.
They also receive benefits like health insurance, sick leave and holiday pay. But maybe
during your pre-screening
of potential employees, you discovered you’d be better off hiring
independent contractors.
Independent contractors tend to make their own schedules and are allowed to choose whether to accept or refuse specific jobs or aspects of a job. They also generally work for more than one company. And they
don’t receive any of the health benefits listed above that an employee
gets.
So first
make sure that you are classifying and paying your employees and independent
contractors correctly.
1099-MISC Forms
At the end
of the year, you’ll need to provide your independent contractors with a record
of what you paid them. That’s where a 1099-MISC form comes in.
You’ll need
to generate one for each independent contractor and send it to them. You aren’t
required to withhold any taxes for independent contractors. They need to take
care of this on their own.
Generating
this form will help keep tabs on everything you paid to your independent
contractors, which in turn helps you track your own tax obligations better. It
will also help you get a better sense of budgeting for the future.
Do They Count as Pay Stubs?
Technically
the 1099-MISC isn’t a pay stub. So, in order to generate pay stubs, you’ll need
to head to an online pay stub generator, like the ones they have at https://www.thepaystubs.com.
You already
have all the crucial information you’ll need because you created a 1099-MISC
form for your independent contractors.
Creating an Independent Contractor Pay Stub
As you can
see, creating an independent contractor pay stub is clear cut and easy to
do. You’ll already have the information necessary because of your requirement
for a 1099-MISC.
So why not
take that extra step and create pay stubs for your independent
contractors!
If
you want to read about more ways to deal effectively with employees and
independent contractors, check out this blog on ways
to reward your
employees!
