Working with independent contractors in the United States
EREditorial team · Updated 14 Oct 20268 min read40 providers compared15 sources
13 Contractor of Record providers we score
20 EOR providers covering the US, if you switch
US$4,900 a month for a US$50,000 hire through an EOR, an example with the median published fee
For federal employment tax, a US independent contractor is someone whose methods your company has no right to control. The IRS judges that right, not the title on the agreement, and labour-law and state tests can draw the line elsewhere.
Short answer
The IRS weighs behavioral and financial control alongside the relationship's type; no single factor settles the question.
The business or the worker can ask the IRS to rule on status on Form SS-8; a ruling may take at least six months.
Treating an employee as a contractor with no reasonable basis can leave the business liable for employment taxes on that worker.
A business reports payments of $2,000 or more a year to a contractor on Form 1099-NEC.
On this page
Where the employee line runs in the United States
For federal employment tax, control draws the line. The IRS asks whether your company controls, or has the right to control, what the worker does and how the job gets done, and that holds for someone working remotely too.[1] It sorts the evidence into behavioral control, financial control and the relationship’s type and reads them together, so a label in the agreement does not move the line. Who decides, how to get a ruling and what a wrong call costs are in the test block below.
The IRS test is not the only one. Under the Fair Labor Standards Act, which sets minimum wage and overtime, the Department of Labor looks at economic reality: whether the worker depends on the business for work or is in business for themself, whatever the contract calls them.[2] State unemployment insurance agencies apply their own rules on what counts as employment.[3] One person can land on different sides of these tests, and this page sets out only the IRS one.
Setting up the contract and IP
The agreement records the relationship you intend, and it carries weight when the daily work matches it. Terms that leave the methods to the contractor point to independence, but the IRS still sets them against the money side and the relationship as a whole.[1]
Ownership of the work needs its own clause. Copyright starts with its author, and a transfer is valid only in a signed writing.[4] Calling the work “made for hire” covers a contractor only in a few listed categories and only with a signed agreement saying so.[5] The IP block states the rule.
Before the first payment, collect the contractor’s taxpayer number on Form W-9.[6] The rest of the paperwork is under how to pay. If the work cannot stay on the contractor side, switching to an EOR shows the cost of one hire, and the Employer of Record page covers that route.
Contractor or employee: the test in United States
The test
IRS common-law test: whether the company has the right to direct and control what the worker does and how the job is done, weighing behavioral control, financial control and the type of relationship; no single factor decides.
Who decides
The IRS. The business or the worker can ask it to decide the worker's status on Form SS-8; a determination may take at least six months.
If it is employment
A business that treats an employee as a contractor with no reasonable basis may be held liable for employment taxes for that worker (Internal Revenue Code section 3509). With a reasonable basis, consistent information returns and no similar worker treated as an employee, Section 530 relief can lift that liability, but it does not settle the worker's status.[1]
Legal form and tax
Sole proprietor
The usual form for an independent contractor, who counts as self-employed for federal tax.[7]
Single-member LLC
When disregarded for federal income tax, its member counts as a sole proprietor for self-employment tax.[7]
Tax
The contractor pays self-employment tax of 12.4% for Social Security and 2.9% for Medicare, usually once net earnings from self-employment reach $400 in the year. The paying business generally withholds and pays no taxes on a contractor's fees.[7][1]
Contract and IP
Who owns the work
Copyright in what a contractor creates belongs to the contractor at first. A commissioned work is a work made for hire only in nine listed categories and with a written agreement signed by both sides; otherwise rights pass to the client only by a written transfer signed by the contractor.[4][5]
How to pay a contractor in United States
Form W-9
The contractor gives the payer their taxpayer identification number (TIN) on it.[6]
Backup withholding
Without a correct TIN from the contractor, the payer withholds 24% from payments.[8]
Form 1099-NEC
Reports nonemployee compensation: a business files it for each person it paid at least $2,000 in the year for services in the course of its business, with the IRS and to the contractor by January 31.[9][10][11]
Contractor of Record providers
All 13 COR providers we score: those working in United States first, then the rest, each by our COR score. Working in United States: 9 (1 by their COR coverage list, the rest inferred from their EOR coverage). How we score
Companies from startups to enterprises, going by Multiplier's segment pages
Not for
Buyers who need the deposit amount before signing: Multiplier calculates it per contract
Top pro
Own SOC 2 (Type I and II), SOC 3 and ISO 27001:2022 on its security page; the AWS certifications listed there are kept apart as the host's
Top con
The "from" prices assume an annual contract. Monthly EOR costs $499 on Core and $559 on Growth, about 11% of countries are priced differently, and compliance-mandated add-ons come on top of EOR and COR
Startups, scaling companies and enterprises, the three groups Native Teams writes for
Not for
Buyers who want to read the EOR or COR agreement before talking to sales: the terms of service are the only contract text online
Top pro
EOR from $99 per employee a month, below all 20 other per-employee EOR prices in USD we compare
Top con
The terms of service are the only contract text online. The EOR and COR agreements are not published, and the terms say a separate signed contract takes precedence
Enterprise teams and small and growing businesses (SMEs), in RemotePass's own words
Not for
Buyers who must review EOR contract terms up front: no EOR agreement is public
Top pro
EOR from $349 per employee a month with tax included; 13 of 20 other EOR prices in dollars start higher
Top con
No EOR agreement is public: the Terms say EOR runs under a separate Consultant Agreement "available on the Site", which we did not find. The public legal documents are the Terms, the Privacy Policy and the Acceptable Use Policy
Companies paying contractors in many countries by bank, wallet, crypto or card
Not for
Companies that need to employ staff abroad: the help centre says Ontop no longer provides EOR directly
Top pro
COR at $49 per contractor a month with no setup fee: the 8 other per-contractor-month COR list prices on this site are all higher
Top con
The $49 COR card and the terms disagree: the card describes direct hiring with your own agreements, the T&Cs and help centre describe Ontop as the contracting party that invoices in its own name
Teams under 50 people, the size Garna's small-business page names
Not for
Buyers who require SOC 2 or ISO 27001 to be named
Top pro
EOR from $200 per employee a month, under 14 of the 20 other dollar EOR starting prices on this site; Garna says there are no hidden fees or FX markups
Top con
No published client price for Contractor of Record, contractor payouts or contractor management; the contractor commission is called small and no percentage is given
All 5 AOR providers we score: those working in United States first, then the rest, each by our AOR score. Working in United States: 4 (1 by their AOR coverage list, the rest inferred from their EOR coverage). How we score
Crypto and web3 teams paying contractors in stablecoins or crypto, a segment Rise names (startups, web3 startups, DAOs, global agencies)
Not for
Companies that need an EOR in countries beyond the US and the UK today
Top pro
Prices are published per head: $49 a contractor a month (discounts for startups and non-profits), $299 for Agent of Record, $399 an employee for EOR
Top con
EOR is documented in 2 countries (US, UK) against a claim of 90+. The parent, Rise Works, Inc., is on the GLEIF register; no own entity is documented in either country
Enterprise-level companies, the audience Atlas's enterprise page names
Not for
Buyers who need a Contractor of Record: under Atlas's AOR the contract stays between the client and each contractor
Top pro
EOR in 141 countries + 5 territories documented here, against a claim of 160+ with wholly owned entities
Top con
At $599 per employee monthly, the EOR price is above 15 of the 20 other USD EOR prices we compare and equal to 4; local employer services, FX and benefits premiums are billed on top
Marketplaces, platforms and enterprises that pay many recipients regularly, in Payoneer's own words
Not for
Buyers who need the service agreement or fee schedule before they sign up
Top pro
Published "Starts at" prices: EOR $199 per employee a month, AOR $99 and contractor management $19 per contractor a month
Top con
No mass-payout price: the page says fees are shown before a payment is confirmed, and the general pricing page lists account fees such as 1.2% to 4% on bank withdrawals
All 32 contractor management providers we score: those working in United States first, then the rest, each by our contractor management score. Working in United States: 19 (6 by their contractor management coverage list, the rest inferred from their EOR coverage). How we score
Companies from startups to enterprises: Playroll has pages for each, and its case studies include startups under 100 staff and mid-market firms of 100 to 1,000
Not for
Contractors who want to be paid other than through Payoneer, the only payout route Playroll uses
Top pro
Its own country pages document EOR hiring in 151 countries + 6 territories, against a claim of 180+
Top con
A refundable deposit of one month's salary per EOR employee; the unused part comes back within two months of the last working day, or once claims are settled if that is later
Startups, growing companies and enterprises, the three segments Pebl writes a page for
Not for
Buyers who need a Contractor of Record: we list Pebl for contractor management, not COR
Top pro
Own SOC 2 Type 2 report and ISO/IEC 27001:2022 certificate, both on Pebl's security page
Top con
No live support channel named: Pebl lists its Alfie AI assistant, in-house experts and a Help Center; its pages say 24/7 support and do not say who answers
A first hire in one new country or a team spread over many, at a startup, mid-market firm or enterprise (G-P has a page for each)
Not for
Buyers who rank EOR providers mostly by the monthly fee
Top pro
G-P claims EOR in 180+ countries; its Globalpedia country guides document 148 countries + 3 territories one by one
Top con
EOR from $599 per employee a month; 15 of 20 other EOR prices in US dollars that we compare start lower; volume discounts are offered but not quantified
Startups, scaling companies and enterprises, the three groups Native Teams writes for
Not for
Buyers who want to read the EOR or COR agreement before talking to sales: the terms of service are the only contract text online
Top pro
EOR from $99 per employee a month, below all 20 other per-employee EOR prices in USD we compare
Top con
The terms of service are the only contract text online. The EOR and COR agreements are not published, and the terms say a separate signed contract takes precedence
Enterprise teams and small and growing businesses (SMEs), in RemotePass's own words
Not for
Buyers who must review EOR contract terms up front: no EOR agreement is public
Top pro
EOR from $349 per employee a month with tax included; 13 of 20 other EOR prices in dollars start higher
Top con
No EOR agreement is public: the Terms say EOR runs under a separate Consultant Agreement "available on the Site", which we did not find. The public legal documents are the Terms, the Privacy Policy and the Acceptable Use Policy
Small businesses, including teams under 10 employees, startups and enterprises: the segments Rippling has pages for
Not for
Buyers who want to compare an EOR price before a sales call
Top pro
Contractor onboarding in 185+ countries and payments in 50+ local currencies, per its contractor page; 160 countries + 2 territories are documented here
Top con
No price for EOR, contractor management or global payroll: the pricing page asks for a custom quote
Companies from startups to enterprises, going by Multiplier's segment pages
Not for
Buyers who need the deposit amount before signing: Multiplier calculates it per contract
Top pro
Own SOC 2 (Type I and II), SOC 3 and ISO 27001:2022 on its security page; the AWS certifications listed there are kept apart as the host's
Top con
The "from" prices assume an annual contract. Monthly EOR costs $499 on Core and $559 on Growth, about 11% of countries are priced differently, and compliance-mandated add-ons come on top of EOR and COR
Crypto and web3 teams paying contractors in stablecoins or crypto, a segment Rise names (startups, web3 startups, DAOs, global agencies)
Not for
Companies that need an EOR in countries beyond the US and the UK today
Top pro
Prices are published per head: $49 a contractor a month (discounts for startups and non-profits), $299 for Agent of Record, $399 an employee for EOR
Top con
EOR is documented in 2 countries (US, UK) against a claim of 90+. The parent, Rise Works, Inc., is on the GLEIF register; no own entity is documented in either country
6.9Our score 6.9 of 10Our contractor management score
Contractor management price from
US$49per contractor a month
Contractor management countries150 claimed
ServicesPayouts · Contractors · COR
Best for
Companies paying contractors in many countries by bank, wallet, crypto or card
Not for
Companies that need to employ staff abroad: the help centre says Ontop no longer provides EOR directly
Top pro
COR at $49 per contractor a month with no setup fee: the 8 other per-contractor-month COR list prices on this site are all higher
Top con
The $49 COR card and the terms disagree: the card describes direct hiring with your own agreements, the T&Cs and help centre describe Ontop as the contracting party that invoices in its own name
6.8Our score 6.8 of 10Limited dataOur contractor management score
Contractor management price from
US$19per contractor a month
Contractor management countries160 claimed
ServicesPayouts · Contractors · AOR · EOR
Best for
Marketplaces, platforms and enterprises that pay many recipients regularly, in Payoneer's own words
Not for
Buyers who need the service agreement or fee schedule before they sign up
Top pro
Published "Starts at" prices: EOR $199 per employee a month, AOR $99 and contractor management $19 per contractor a month
Top con
No mass-payout price: the page says fees are shown before a payment is confirmed, and the general pricing page lists account fees such as 1.2% to 4% on bank withdrawals
6.0Our score 6.0 of 10Limited dataOur contractor management score
Contractor management price from
3%of each payout
ServicesPayouts · Contractors
Best for
Companies that pay freelancers and contractors abroad and want one contract with one billing entity (Payroll)
Not for
Buyers whose security review needs a named SOC 2, ISO 27001 or similar certification
Top pro
Payroll publishes its fees: 39 EUR / 42 USD per withdrawal on the tariff new accounts start on, or 5%, 4% or 3% of payouts by monthly turnover (3% above 100,000 EUR/USD a month)
5.3Our score 5.3 of 10Limited dataOur contractor management score
Contractor management price from
3%of each payout
ServicesEOR · Payouts · Contractors · Payroll
Best for
Startups, SMBs, agencies and enterprises: the segments Remozo names for its contractor product
Not for
Buyers whose security review asks for SOC 2 or ISO 27001 held by Remozo itself
Top pro
Contractor payouts claimed in 190+ countries; 98 are listed one by one in Remozo's help centre
Top con
Contractor plan from 3% per payout: for contractor payouts, 2 of the 6 other percentage prices we compare are lower and 1 the same. The contractor page says from 1.5%, which we do not score
4.9Our score 4.9 of 10Limited dataOur contractor management score
Contractor management price
Custom quote
ServicesEOR · COR · Payouts · Contractors
Best for
Teams under 50 people, the size Garna's small-business page names
Not for
Buyers who require SOC 2 or ISO 27001 to be named
Top pro
EOR from $200 per employee a month, under 14 of the 20 other dollar EOR starting prices on this site; Garna says there are no hidden fees or FX markups
Top con
No published client price for Contractor of Record, contractor payouts or contractor management; the contractor commission is called small and no percentage is given
4.5Our score 4.5 of 10Limited dataOur contractor management score
Contractor management price
Custom quote
ServicesPayouts · Contractors
Best for
Companies that pay many contractors and want a single agreement instead of one per person
Not for
Buyers who need a price before they talk to sales
Top pro
One agreement covers any number of contractors; Restaff signs the individual contracts
Top con
No client price: the fee is the formula T = Sa / K with K shown only in the client's account, Restaff can change K after notifying the client (Terms 10.2), and the invoice is paid in advance
All 24 contractor payouts providers we score: those working in United States first, then the rest, each by our contractor payouts score. Working in United States: 7 (3 by their contractor payouts coverage list, the rest inferred from their EOR coverage). How we score
Companies paying contractors in many countries by bank, wallet, crypto or card
Not for
Companies that need to employ staff abroad: the help centre says Ontop no longer provides EOR directly
Top pro
COR at $49 per contractor a month with no setup fee: the 8 other per-contractor-month COR list prices on this site are all higher
Top con
The $49 COR card and the terms disagree: the card describes direct hiring with your own agreements, the T&Cs and help centre describe Ontop as the contracting party that invoices in its own name
Startups, SMBs, agencies and enterprises: the segments Remozo names for its contractor product
Not for
Buyers whose security review asks for SOC 2 or ISO 27001 held by Remozo itself
Top pro
Contractor payouts claimed in 190+ countries; 98 are listed one by one in Remozo's help centre
Top con
Contractor plan from 3% per payout: for contractor payouts, 2 of the 6 other percentage prices we compare are lower and 1 the same. The contractor page says from 1.5%, which we do not score
Crypto and web3 teams paying contractors in stablecoins or crypto, a segment Rise names (startups, web3 startups, DAOs, global agencies)
Not for
Companies that need an EOR in countries beyond the US and the UK today
Top pro
Prices are published per head: $49 a contractor a month (discounts for startups and non-profits), $299 for Agent of Record, $399 an employee for EOR
Top con
EOR is documented in 2 countries (US, UK) against a claim of 90+. The parent, Rise Works, Inc., is on the GLEIF register; no own entity is documented in either country
Enterprise teams and small and growing businesses (SMEs), in RemotePass's own words
Not for
Buyers who must review EOR contract terms up front: no EOR agreement is public
Top pro
EOR from $349 per employee a month with tax included; 13 of 20 other EOR prices in dollars start higher
Top con
No EOR agreement is public: the Terms say EOR runs under a separate Consultant Agreement "available on the Site", which we did not find. The public legal documents are the Terms, the Privacy Policy and the Acceptable Use Policy
Startups, scaling companies and enterprises, the three groups Native Teams writes for
Not for
Buyers who want to read the EOR or COR agreement before talking to sales: the terms of service are the only contract text online
Top pro
EOR from $99 per employee a month, below all 20 other per-employee EOR prices in USD we compare
Top con
The terms of service are the only contract text online. The EOR and COR agreements are not published, and the terms say a separate signed contract takes precedence
6.4Our score 6.4 of 10Our contractor payouts score
Contractor payouts price from
0.25%of each payout
Contractor payouts countries46 claimed
Minimum termNone
ServicesPayouts
Best for
Platforms and marketplaces that pay sellers, freelancers, creators or service providers, as Stripe describes its customers
Not for
Companies that want a provider to run contractor onboarding, contracts or closing documents: Stripe's pages describe a payment flow, not those
Top pro
Fee schedule published: 0.25% + 25¢ per payout and $2 per monthly active account, plus 0.25% of payout volume for funds routing and platform management where it applies, Instant Payouts at 1% and cross-border payouts from 0.25% of payout volume
Top con
No country list for Connect payouts. The Connect page says Connect Onboarding supports 46+ countries and does not tie that to payouts; we document none
6.1Our score 6.1 of 10Limited dataOur contractor payouts score
Contractor payouts price from
US$42per payout
ServicesPayouts · Contractors
Best for
Companies that pay freelancers and contractors abroad and want one contract with one billing entity (Payroll)
Not for
Buyers whose security review needs a named SOC 2, ISO 27001 or similar certification
Top pro
Payroll publishes its fees: 39 EUR / 42 USD per withdrawal on the tariff new accounts start on, or 5%, 4% or 3% of payouts by monthly turnover (3% above 100,000 EUR/USD a month)
5.8Our score 5.8 of 10Limited dataOur contractor payouts score
Contractor payouts price
Custom quote
Contractor payouts countries200 claimed
ServicesPayouts
Best for
Enterprises and marketplaces paying large numbers of people in many countries (royalties, insurance claims, airline reimbursements, clinical trials, prizes and rewards)
Not for
Companies that want to see a price before contacting sales
Top pro
Own SOC 1, SOC 2, ISO 27001 and PCI DSS Level 1, stated on hyperwallet.com/security-compliance; the SOC 2 type, report and certifier are not shown
Top con
No price: buyers are sent to a Solutions Expert, and no setup fee, deposit or minimum term is stated either
5.8Our score 5.8 of 10Limited dataOur contractor payouts score
Contractor payouts price
Custom quote
Contractor payouts countries190 claimed
ServicesPayouts · Contractors · AOR · EOR
Best for
Marketplaces, platforms and enterprises that pay many recipients regularly, in Payoneer's own words
Not for
Buyers who need the service agreement or fee schedule before they sign up
Top pro
Published "Starts at" prices: EOR $199 per employee a month, AOR $99 and contractor management $19 per contractor a month
Top con
No mass-payout price: the page says fees are shown before a payment is confirmed, and the general pricing page lists account fees such as 1.2% to 4% on bank withdrawals
5.0Our score 5.0 of 10Limited dataOur contractor payouts score
Contractor payouts price
Custom quote
Contractor payouts countries150 claimed
ServicesEOR · COR · Payouts · Contractors
Best for
Teams under 50 people, the size Garna's small-business page names
Not for
Buyers who require SOC 2 or ISO 27001 to be named
Top pro
EOR from $200 per employee a month, under 14 of the 20 other dollar EOR starting prices on this site; Garna says there are no hidden fees or FX markups
Top con
No published client price for Contractor of Record, contractor payouts or contractor management; the contractor commission is called small and no percentage is given
4.9Our score 4.9 of 10Limited dataOur contractor payouts score
Contractor payouts price
Custom quote
Contractor payouts countries190 claimed
ServicesPayouts · Contractors
Best for
Companies that pay many contractors and want a single agreement instead of one per person
Not for
Buyers who need a price before they talk to sales
Top pro
One agreement covers any number of contractors; Restaff signs the individual contracts
Top con
No client price: the fee is the formula T = Sa / K with K shown only in the client's account, Restaff can change K after notifying the client (Terms 10.2), and the invoice is paid in advance
US$4,948 a month[14][12][15]On a US$50,000 salary: salary, employer contributions and the median published fee (17 providers). Not all-in: the cost section of the EOR page lists what it leaves out.
How does the IRS tell a contractor from an employee?
It asks whether the company has the right to direct and control what the worker does and how. Evidence on behavioral control, financial control and the relationship's type is weighed as a whole.
Can I ask the IRS whether my contractor is really an employee?
Yes. The business or the worker can file Form SS-8, and the IRS then decides the worker's status. A determination can take at least six months.
What happens if a US contractor is reclassified as an employee?
With no reasonable basis for the contractor treatment, the business may be held liable for employment taxes on that worker. With a reasonable basis and consistent information returns, Section 530 relief can lift the tax liability, though it does not decide the worker's status.
Who owns the work a US contractor creates?
The contractor, at first. A commissioned work counts as made for hire only in nine listed categories and with a signed written agreement; otherwise copyright passes to the client only through a written transfer the contractor signs.
Do I withhold tax from a US contractor's payments?
Generally no. The contractor pays self-employment tax. The exception is backup withholding at 24% when the contractor has not given a correct taxpayer identification number.
Works in United Statesa
