Which statement describes compensation for an independent contractor?

Which statement describes compensation for an independent contractor?

• A. Be paid hourly wage.
• B. Be paid per job/commission/bid.
• C. Earn a guaranteed salary.
• D. Receive employee benefits.

Answer: (B)

Independent contractors are paid for the work they deliver on a specific job. They typically bid or quote a price for the project, or work on a commission basis tied to the job’s value. This reflect their status as self-employed and responsible for their own taxes, expenses, and benefits. Because they aren’t on the employer’s payroll, they don’t usually receive an hourly wage, a guaranteed salary, or employee benefits. In contrast, employees are paid by the hour or with a salary and often receive benefits, but that’s not how an independent contractor gets compensated.

Independent contractors are paid for the work they deliver on a specific job. They typically bid or quote a price for the project, or work on a commission basis tied to the job’s value. This reflect their status as self-employed and responsible for their own taxes, expenses, and benefits. Because they aren’t on the employer’s payroll, they don’t usually receive an hourly wage, a guaranteed salary, or employee benefits. In contrast, employees are paid by the hour or with a salary and often receive benefits, but that’s not how an independent contractor gets compensated.