Key takeaways:

• FTE stands for "Full-Time Equivalent" and is a standard measure of a full-time employee's workload.
• Full-time employees (FTEs) are entitled to benefits such as health insurance, paid time off, and retirement benefits, while independent contractors are not.
• When deciding between hiring an FTE or an independent contractor, it's important to consider legal and regulatory implications, as well as cost implications.

What does FTE mean, and why does it matter?

When it comes to hiring employees, there is a difference between hiring full-time employees (FTEs) and independent contractors. FTEs are considered employees of the company and are entitled to benefits such as health insurance, paid time off, and retirement benefits. Independent contractors, on the other hand, are not considered employees and are not entitled to these benefits.

When it comes to compliance and legal considerations, there are also differences between hiring FTEs and independent contractors. For example, FTEs are subject to federal and state taxes, while independent contractors are not. Employers are also responsible for withholding taxes from the paychecks of FTEs and for paying the employer's portion of these taxes.

Another important factor to consider when hiring FTEs is the cost. Hiring FTEs can be much more expensive than hiring independent contractors because of the benefits and other costs associated with employing someone full-time. Additionally, there may be additional costs associated with training and onboarding FTEs.

When deciding whether to hire an independent contractor or an FTE, it's important to consider the legal and regulatory implications, as well as the cost implications. While FTEs offer stability and the ability to provide benefits, they can also be much more expensive than hiring independent contractors. It's important to weigh the pros and cons and make the best decision for your business.

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