Employee or Independent Contractor?


You really need some extra help with cleaning your church facilities.  Why not just hire a teen to vacuum a few hours a week and pay them per hour?  Then you could avoid the paperwork (I-9, social security and income tax withholding, unemployment compensation etc.).  Can't they just be an independent contractor so I don't have to hire them as an employee?

Most people retained to do the day-to-day work of a church are considered employees. The IRS has several factors they have identified that clarify whether a person is an independent contractor or employee.  In the case of hiring a teen, he/she should not be considered an independent contractor because they fit the category of employee on several tests--they are given instructions for when, where, and how to work; paid by the hour; trained; work done on employer's premises; etc.  The IRS expects the church to comply with the reporting, withholding, and payment obligations that exist when an individual is determined to be an employee.

Have you classified the persons whom you pay correctly?  Check out other sites on the web with more information on the IRS factors and correctly classifying persons paid for serving the church. 

This is for the US.  What's the story in Canada?

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Canada has much the same rules. Does the contractor own the equipment he uses? Can the contractor choose the times he works? I am not an accountant so if someone needs more information an accountant is the best place to start.

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