Paying Your Team: Contractor vs Employee Basics

Whether someone on your team is a contractor or an employee depends on local law and on how the relationship actually works, not on what you call it. This post is a general introduction, not legal, tax or employment advice. Rules differ by country and state, so check with a local accountant or lawyer before you hire.

Key differences

Broadly, a contractor runs their own business and you buy a result or a service. An employee works within your business under your direction. The factors that authorities usually look at include:

No single factor decides it. Authorities look at the whole picture. Second shooters who bring their own cameras and work for several studios usually look more like contractors. A full-time editor at your desk, working your hours, may look more like an employee.

Risks

Getting this wrong can be costly, and the consequences depend on where you are. Possible areas include:

• Unpaid tax or social contributions.
• Claims for paid leave, minimum pay or other benefits.
• Penalties and interest.
• Disputes over who owns the work.
• Liability for injuries on a shoot.

You also risk misunderstandings with the people who work for you. Clear terms at the start reduce disagreements later.

Example: a studio calls a full-time editor a contractor, but sets their hours, supplies the computer and expects them to work only for the studio. A tax office could view that as employment. This is a general illustration, not a legal conclusion.

Records

Good records help in every case. Keep, for each person:

• A signed agreement.
• Their legal name, contact details and, where required, tax or registration number.
• Invoices or payment requests.
• Dates and hours worked, and the job each belongs to.
• Amount, payment date and method.
• Expenses you reimbursed.
• Proof of payment.

Keep them for as long as your local rules require, and ask your accountant what that is. A system that records payments by person and by job makes year-end much easier. For a method, see our post on tracking team hours and payouts.

Agreements

A written agreement should state what the relationship is and what each side does. Typical items:

1. The role, services and deliverables.
2. Pay, rates, payment dates and expenses.
3. Who supplies equipment.
4. Whether they may work for others.
5. Confidentiality and handling of client data.
6. Ownership of images and credit.
7. Insurance.
8. Cancellation, notice and ending the agreement.

Have a local lawyer review a template before you use it. A template is not legal advice. Our onboarding checklist lists the other things to cover on day one, and the second shooter guide explains what that role usually involves.

ClickBook lets you give team members roles so editors and freelancers see only their own work, never prices or income, and you can record payments to each person against the job. It does not give tax advice or run payroll. Look at a demo for how records sit with each job.

Seek advice

Talk to a local accountant or employment adviser when:

• You plan to hire your first regular team member.
• Someone works for you most of the week.
• You hire across borders.
• You are not sure how to classify a role.
• You plan to pay in cash or in kind.

Bring a list of the tasks, hours, tools and pay you plan. A one hour consultation can prevent a costly mistake. Review your arrangements once a year, as work patterns and laws change.

Questions to take to your adviser

A short list makes a consultation more useful:

1. Given how my team works, how would the local rules treat each role?
2. Which registrations, taxes or insurance do I need if I hire?
3. How should I record and report payments to contractors?
4. What should an agreement say, and should it change if someone works with me long term?
5. What are the rules for hiring across borders or paying people in another currency?
6. How long should I keep records?

Write the answers down and file them with your agreements. Laws change, so ask again when your team grows or you add a new kind of role. It is cheaper to ask first than to correct a mistake later.

Keep your arrangements consistent too. If two people do the same job on the same terms, treat them the same way. Different treatment without a reason can cause problems with the people involved and with authorities.

Frequently asked questions

Are second shooters contractors or employees?

It depends on local law and the facts of the working relationship. Control over hours, tools and methods, and whether they work for others, are common factors. Ask a local adviser to assess your situation.

What happens if I classify someone incorrectly?

Consequences can include back taxes, penalties and claims for benefits, depending on where you are. This is why it is worth getting local advice early.

What records should I keep for team payments?

Keep a signed agreement, invoices or payment requests, dates, amounts, hours and what each job covered, plus proof of payment.

Do I need insurance for contractors?

Often it helps to check cover for liability and equipment, and some places require specific cover for employees. Ask a local adviser or insurer.