What is the difference between a contract employee and a regular permanent employee?

Answer 1

If you area contract employee, that means usually that you take out your own taxes and that you are basically working for yourself. You are contracting your services to someone else. Reg employees are entitled to benefits and they take out taxes and pay their half of it to social security for you along with what you pay out of your check.

Answer 2

Sad to say, the difference is usually that the contract employee can, and often does, get the shaft a lot more than a regular employee. A contract employee is just that... a contracted unit from some outside firm. Basically, it's a tool to fill a role in thier organization that is only a number on a page. If they deem that role not necessary anymore, all they have to do is strike the number from thier books and you're gone. They don't have to give rhyme or reason, you are an asset to them.. a dollar amount that allows them not to have to offer a regular employee health benefits or other offered incentives of someone on their regular payroll. Think of the role as that of the indentured servant working on a sharecropper farm in the 1800s.... and it's pretty poignant. You do the work, they benefit, they dole out a percentage to your superiors, who take their cut and dole out what's left to you. The role of a contract employee in my mind should be considered strictly as the role of a way to obtain credentials and experience that can better benefit you later in a career of YOUR choosing.

Anyway, hope this helps.... from the annals of one contract employee out there toiling for 'the man'. ;)

Answer 3

A contract employee is employed for a specific amount of time in a specific capacity. They might or might not have benefits if the company offers them. They are obliged to work and the company is obliged to maintain their services for the term of their contract unless both parties agree to waive the contract. A regular employee may quit at will or the company can terminate them at will. If the company offers benefits, a regular employer will receive them. A contract employee might be employed by a company other than the one they work for or can be an independent contractor.

Answer 4

Also, it is when an person works for another company, ie: is an employee of company A who has been contracted by company B to manage a specific contract service. That person would report to work everyday at company B until the contract is up. Company A pays that person's salary and benefits. A regular employee was hired and is paid by, for illustration purposes, Company B.

Answer 5

Contract employees work for an hourly rate, do not have any additional money taken out of their paycheck for taxes, unemployment, social security and are not eligible for company offered benefits. They must also take care of the retirement planning on their own. Typically they are hired for a fixed amount of time, but could also have the length open ended. As a result, they must take care of paying their own taxes, typically filed quarterly as well as retirement planning.

A permanent employee is basically the opposite of that. They are eligible for any benefits the company has to offer, taxes are taken from their paychecks and things like that. They may also be paid an hourly rate or an annual salary.

Answer 6

A contract employee often doesn't get his/her paycheck or benefits from the company he/she is working, instead they get those from a contract vendor offering you to the location as "goods n' services".

Also, contract employment isn't always permanent, but can be a contract for several months or even years, at which time "they" evaluate whether they'll be keeping you on, or if the project is complete and they let you go.

It is common, however, for the site to hire the contractor on as a permanent native employee.

Answer 7

Contract is short term for a project or a predetermined amount of time.
Permanent is until you fire the employee. Although you can sort of terminate a contract employee too.

Answer 8

Permanent employees are entitled to benefits and employers are required to take taxes out.

Contract employees usually have a start/end date and no taxes are taken out and no benefits are available to them.

Contract employees have to file a 1099 vs 1040 at tax time because they have to submit their own tax deductions.

Answer 9

Contractual employees work for a set amount of time for a set amount of money, whereas regular employees stay until they quit or get fired and get raises, etc.