This section generally clarifies that payments made to the independent contractor do not include withholding tax for income tax or payroll taxes (including FICA taxes for Social Security and Medicare). No federal or national income tax is withheld on payments made to the contractor unless this is necessary by safeguard withholding tax requirements. No FICA tax is deducted from the contractor`s remuneration and it is not deferred by the company on behalf of the contractor. It`s time to formalize relationships with your consultants, independent contractors and collaborators – with the appropriate documents. Ensuring that you have the right employment relationship contracts to establish the various business relationships you have with your employees and independent contractors is a crucial first step in onboarding a new employee. Depending on the type of work, you may want to impose restrictive agreements on the independent contractor. The contract should contain a statement that the contractor understands that he is not entitled to retirement or old-age benefits, health insurance, leave benefits, sickness benefits, sickness benefits, vacation leave or other ancillary benefits generally granted by an employer. You are therefore giving a new face to your SME. You have determined, using the three categories defined by the Internal Revenue Service, whether your new employee is an employee or an independent contractor. This very important part of the agreement clearly defines the worker as a self-employed contractor and not as a worker.