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Often Independent Contractors are completely unaware that they are not Employees as defined in South African labour legislation and therefore unprotected by labour legislation.
The main pieces of employment legislation, chief among which are the Labour Relations Act 66 of 1995 (LRA) the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Employment Equity Act 55 of 1998 (EEA), apply to employees and not independent contractors.
Employees in South Africa are entitled to certain minimum employment benefits, while independent contractors are not. Subject to some exclusions, all employees are entitled to a number of statutory minimum entitlements and basic conditions of employment.
Some general protections provided under the Fair Work Act 2009 extend to independent contractors and their principals. Independent contractors and principals are afforded limited workplace rights, and the right to engage in certain industrial activities.
If you are an independent contractor, then you are self-employed. The earnings of a person who is working as an independent contractor are subject to self-employment tax. To find out what your tax obligations are, visit the Self-Employed Individuals Tax Center.
Whatever you call yourself, if you are self-employed, an independent contractor, or a sole proprietor, a partner in a partnership, or an LLC member, you must pay self-employment taxes (Social Security and Medicare). Since you are not an employee, no Social Security/Medicare taxes are withheld from your wages.
A 1099 worker is one that is not considered an employee. Rather, this type of worker is usually referred to as a freelancer, independent contractor or other self-employed worker that completes particular jobs or assignments. Since they're not deemed employees, you don't pay them wages or a salary.
Simply put, being an independent contractor is one way to be self-employed. Being self-employed means that you earn money but don't work as an employee for someone else.
Independent contractors provide goods or services according to the terms of a contract they have negotiated with an employer. Independent contractors are not employees, and therefore they are not covered under most federal employment statutes.
Simply put, being an independent contractor is a way of being self-employed. Is an independent contractor self-employed? Yes. Independent contractors are self-employed who earn an income but do not work as employees.