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ITG FAQ #1 Answer-What is the difference between an employee and an independent contractor?

An employer must generally withhold income taxes, withhold and pay social security and Medicare taxes, and pay unemployment tax (if applicable) on wages paid to an employee. An employer does not generally have to withhold or pay any taxes on payments to independent contractors. Independent contractors are self-employed individuals.

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Page Last Reviewed or Updated: 10-Dec-2014