Definition of Statutory employee:
Worker treated as employee for statutory deductions (such as social security) but treated as self-employed for income tax deductions.
A statutory employee is an independent contractor that is treated as an employee for tax withholding purposes if they meet certain conditions. Employers are not permitted to withhold taxes for most independent contractors, but statutory employees are not considered an employee or an independent contractor in a strict sense. As a result, statutory employees may receive both W-2s and 1099s from their employer.
This class of employee may deduct work-related expenses on Schedule C instead of Schedule A. Statutory employees are usually salespeople or other employees who work on commission, but they may also be individuals who provide services while using a company's tools or resources.
How to use Statutory employee in a sentence?
- A statutory employee is an independent contractor who is considered an employee for tax withholding purposes if they meet certain conditions.
- This typically means they will receive a W-2 but are otherwise not considered full employees.
- A statutory employee typically receives certain tax benefits that 1099 employees would also enjoy.
Meaning of Statutory employee & Statutory employee Definition