If you’re self-employed, such as freelancing for your primary source of income, you may have questioned if there would be any advantages to subcontracting your workload. When a self-employed contractor such as yourself employs other professionals to complete work, this is referred to as subcontracting.
There remain in fact numerous advantages to subcontracting for self-employed people, but likewise lots of things to consider and be aware of. In this article, we are going to highlight numerous important factors to consider, and how to get the most benefit out of subcontracting your tasks.
Managing Payroll and Tax Documents for Subcontractors
Depending on the subcontract plan, the subcontractors you employ may either be categorized as independent professionals or employees. When tax filing season rolls around, it’s very important to be mindful of which classification they’ll fall into.
If the subcontractors you hire end up being classified as staff members, for instance, you’ll be accountable for creating pay stubs that provide information such as earnings earned, tax and benefit withholdings.
You may likewise need to provide pay stubs to independent contractors, and 1099 types if you’re paying the subcontractor more than $600 within the year (one-time payment or $600 throughout a year).
If you’re self-employed and working with subcontractors, FormPros has helpful paperwork on creating paystubs.
Examples of Subcontracting for Self-Employed Individuals
Let’s state you’re an online freelance author who works out an agreement with a customer for a rather big task. The customers anticipate you’ll provide 100 blog site articles of around 600– 800 words per subject, all provided within a month’s time.
For a veteran freelance writer, 60,000 words in a month is not a terribly difficult goal. Assuming you can write an average of ~ 600 words (1 subject) per hour, and you’re able to finish 6– 8 subjects daily writing full-time, it would take you around ~ 2 weeks to complete the project on your own.
Naturally, composing at that volume and speed would extremely rapidly cause burnout. So you may think about subcontracting a few of your subjects to other freelance writers, perhaps negotiating to pay them a lesser rate than what you make from your client.
This sounds fantastic in theory. You’re decreasing your own work, and earning a small revenue on the subcontractor’s work. It’s not totally rosy as it appears, if you just leap into this sort of subcontracting plan.
For instance, your customer might anticipate your specific composing design, and be puzzled when a few of your topics are clearly composed by someone else. Your client might not care about that at all, but if they did, you ‘d spend time editing and rewording the subcontractors work to more carefully emulate your own composing design.
You may likewise hire very inexpensive subcontractors who provide sub-optimal work or perhaps plagiarized content, and again be hanging out sprucing up their work to the standards that you would personally deliver to your customer.
You also want to take care if your client had you sign an NDA or agreement that you are the sole individual working on and educated of the task. Farming out little bits of the work would undoubtedly remain in breach of an NDA.
Tips on Effectively Using Subcontractors
When you work with subcontractors, you efficiently end up being a sort of project manager. In the example of a freelance writer above, this could even cause starting your own sought-after organization services and supplying a greater volume of services to clients as a company.
However, whether you use subcontractors as a one-time thing, or have the objective of developing yourself into a genuine subcontracting firm, there are a number of things you ought to do to make whatever go smoothly.
Your subcontractors require to be familiar with all important job details and expectations. If you discover yourself discussing the exact same standards to several people, you ought to just develop a file that lays out all task guidelines in detail.
Likewise ensure you provide examples of the quality of work expected. Using the freelance writing example once again, a very cheap author you farm out to might provide obviously plagiarized material from different online blog sites.