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How do I create an Independent Contractor Agreement? State the location.Describe the type of service required.Provide the contractor's and client's details.Outline compensation details.State the agreement's terms.Include any additional clauses.State the signing details.
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. If you are an independent contractor, then you are self-employed.
The payment given to an independent contractor is compensation that is agreed upon in the contract provided by their client. Independent contractors are also responsible for their own contributions to Pag-Ibig, Philhealth, and SSS.
The law defines an employee as someone who is engaged under a contract of service, while an independent contractor is one who is engaged under a contract for services.
An attorney or accountant who has his or her own office, advertises in the yellow pages of the phone book under Attorneys or Accountants, bills clients by the hour, is engaged by the job or paid an annual retainer, and can hire a substitute to do the work is an example of an independent contractor.
Apply for Book of Accounts 3 filled-out copies of BIR Form Application 1901 (Registration for Self-Employed and Mixed Income Individuals) A Philippine Statistics Authority (PSA) birth certificate. A labor contract or company certification. Books for stamping. Your cash receipt journal. Your cash disbursement journal.
An independent contractor is a self-employed person or entity contracted to perform work foror provide services toanother entity as a nonemployee. As a result, independent contractors must pay their own Social Security and Medicare taxes.
Key takeaway: Independent contractors are not employed by the company they contract with; they are independent as long as they provide the service or product agreed to. Employees are longer-term, on the company's payroll, and generally not hired for one specific project.
Differentiating between employees and independent contractors is essential since the law treats both groups differently. While employers are obligated to comply with Philippine labor laws in regards to their employees, the same obligation does not apply to any independent contractors they hire.