Most contractors only count the wage. Find out your true cost per hour — including taxes, benefits, downtime, and overhead — so you never underprice a job.
With a 1099 subcontractor you pay their rate directly — no employer taxes, no benefits, no workers comp (verify with your insurer). However, their rate is typically 15–30% higher than an equivalent employee wage to account for their own self-employment taxes.
⚠️ Misclassifying employees as contractors can result in IRS penalties. Consult a CPA if unsure.
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