QUESTION IMAGE
Question
a computer training business needs to hire a consultant for a project to revamp the training courseware. once the courseware is revamped, the consultants services are complete. which business compensation structure will pay the consultant and lead to the smallest payroll tax liability for the business?
contract
commission
salary
hourly
When a business hires a consultant for a specific project (revamping courseware) and the consultant's services end after the project, using a contract (independent contractor arrangement) typically results in the business having smaller payroll tax liability. This is because payroll taxes (like Social Security, Medicare taxes for employees) are not owed for independent contractors; the contractor is responsible for their own self - employment taxes. Commission, salary, and hourly are for employees (or commission - based employees) where the business has more payroll tax obligations.
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A. Contract