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What Is The Difference Between Working As An Employee Versus A Contractor?

In the healthcare industry, professionals can work as employees or independent contractors. Each arrangement comes with its own set of advantages and considerations. In this blog post, we will explore the key differences between being an employee at a hospital and working as an independent healthcare contractor, such as a locum tenens provider. We will touch upon the income structure, job security, and the freedom of contract negotiations, including tax differences, to help you better understand these different working arrangements.

Income Structure and Tax Differences

One of the distinctions between being an employee and a contractor is the income structure and tax implications. As an employee, your income is typically in the form of a salary or hourly wages, subject to deductions for taxes, benefits, and other payroll obligations. The employer is responsible for withholding and remitting taxes on your behalf.

In locum tenens, you are responsible for managing your income and taxes as a contractor. Contractors often receive compensation per-project or per-hour basis and are typically responsible for their tax withholdings and payments. Understanding the specific tax implications and obligations associated with contractor status is essential.

Job Security

Job security is another critical consideration when comparing employee status with contractor status. As an employee, you may enjoy a higher level of job security with the potential for benefits such as health insurance, retirement plans, paid time off, and more. Employees often have a stable and ongoing relationship with the employer, providing continuity and long-term career growth opportunities.

On the other hand, contractors, including locum tenens providers, typically work on a temporary or project-based basis. While this offers flexibility and variety in work assignments, it may also mean a less predictable and potentially less stable work schedule. Contractors often seek new assignments once their current engagement is complete.

Freedom of Contract Negotiations

One of the advantages of working as an independent contractor is the increased freedom and flexibility in contract negotiations. 

Contractors can negotiate their terms and conditions, including compensation, work hours, and scope of work. They have more control over the projects they accept, allowing them to tailor their professional experiences to their preferences. 

This flexibility can particularly appeal to healthcare professionals seeking greater career autonomy. 

However, it’s important to note that negotiating contracts also means taking on additional responsibilities, such as ensuring appropriate malpractice insurance coverage and managing personal finances.


Understanding the differences between working as an employee and working as an independent contractor, such as a locum tenens provider, is essential for healthcare professionals evaluating their locum tenens options. 

Whether you choose to be an employee or a contractor depends on your priorities, lifestyle, and professional goals. Contact VISTA Staffing today; we can help you find the right fit for your career aspirations.

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