Does a contract that calls someone a contractor settle it?

Not on its own. Check how the work is done in practice, and write down where practice and contract differ. The contract is one piece of evidence. Run the country check, and take advice on any case that is close.

Can the same person be a contractor in one country and an employee in another?

Yes, it can happen. Tests differ by country, and within one country they can differ between tax law and employment law, as GOV.UK says for the UK. Run the check for the country where the person works.

What if the answer is employee but you have no entity there?

An employer of record can employ the person for you in that country. You can also set up your own entity. The checklist for your first international hire sets out the steps.

Employee vs contractor checklist: 18 questions to ask

What should you check to decide employee or contractor?

The questions follow the three groups of evidence the US tax authority uses: behaviour, finances and the relationship. Other countries use their own tests, so treat your answers as evidence to bring to the country check at the end, not as a ruling. Write down a real example for each answer.

Who controls the work

Ask who decides how the work is done. Done when: You have written an example of a recent task and who chose the method, the order and the tools.
Ask who sets the hours and the place of work. Done when: You know whether the person sets their own schedule, or has hours, a location or on-call duties that you set.
Check whether you train the person or give them a manager. Done when: You know if they follow your procedures, attend your team meetings or report to someone in your company.
Check whether the person can send a substitute. Done when: The contract and your practice both say whether someone else can do the work, and who pays them.
Check how the work is checked. Done when: You know whether you review the finished result or supervise the process day to day.

Who controls the money

Ask who supplies the tools and equipment. Done when: You have a list of what the person owns or pays for, and what you provide.
Ask who carries the costs and the risk. Done when: You know whether the person pays their own expenses, can make a loss, and bears the cost of fixing their own errors.
Check whether the person works for other clients. Done when: You know whether they are free to, whether they do, and whether you are their only source of income.
Check how they are paid. Done when: You know whether they get a regular wage or salary for time worked, or invoice for a fixed price or a deliverable.
Check whether the person markets their services. Done when: You know whether they have their own business name, website, insurance or business registration.

The relationship

Read what the written agreement says, and compare it with practice. Done when: You have noted where the contract and the real working arrangement differ, because the label alone may not settle the question.
List any benefits you give the person. Done when: You know whether they get paid leave, a pension, insurance or other employee-style benefits.
Ask whether the work will continue. Done when: You know whether it is a defined project with an end date or an ongoing role without one.
Ask whether the work is a core part of your business. Done when: You know whether the person does the work that your business exists to do, or something outside it.

The country check and the decision

Run the contractor classification tool for the country. Done when: You have the result for the country where the person works, and a note of the points it flagged.
Contractor classification tool
Read the country guide on contractors. Done when: You have read what it says about tests and penalties for that country, not another one.
Contractor hiring guides
Decide the route and write down why. Done when: One page says employee or contractor, which answers it was based on, who made the decision and the date.
Misclassification, explained
Set a date to review the decision. Done when: The review is in the calendar, and you will ask the questions again if the role, hours or income change.

That is the whole checklist.

Why does the answer matter?

Classification decides which rights a person has and which responsibilities the engager carries. GOV.UK says that a person's employment status helps determine their rights and their employer's responsibilities, that a person may have a different employment status in tax law, and that courts and tribunals can make final decisions on employment status.

The IRS groups its evidence in three: behavioural control, financial control and the type of relationship. The questions above follow those groups. They help you test the arrangement by how the work is done, not by the title.

What does Teamed offer for contractors?

Teamed offers two ways to cover a contractor. Guard is misclassification cover, and you remain the engager. In Protect, Teamed engages the contractor and takes the liability.

Contractor classification tool
A country-by-country check you can run now.
Contractor management checklist
What to do once the answer is contractor.
Independent contractor or employee, defined
The two terms side by side.
Worker misclassification
What it is and why it is costly.
The IRS 20-factor test
Where many of the US control questions come from.

Where do the facts on this page come from?

Independent contractor (self-employed) or employee?, Internal Revenue Service. Read on 20 October 2026.
Employment status, GOV.UK. Read on 20 October 2026.

Questions people ask

Does a contract that calls someone a contractor settle it?
Not on its own. Check how the work is done in practice, and write down where practice and contract differ. The contract is one piece of evidence. Run the country check, and take advice on any case that is close.
Can the same person be a contractor in one country and an employee in another?
Yes, it can happen. Tests differ by country, and within one country they can differ between tax law and employment law, as GOV.UK says for the UK. Run the check for the country where the person works.
What if the answer is employee but you have no entity there?
An employer of record can employ the person for you in that country. You can also set up your own entity. The checklist for your first international hire sets out the steps.

This checklist is a planning aid, not legal advice. Where a step depends on a country's rules, check the country guide or take advice.

Send this page to an AI and ask it to explain it.

Employee or contractor? A checklist to answer it before you sign.

What should you check to decide employee or contractor?

Who controls the work

Who controls the money

The relationship

The country check and the decision

Why does the answer matter?

What does Teamed offer for contractors?

Where do the facts on this page come from?

Questions people ask

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What should you check to decide employee or contractor?

Who controls the work

Who controls the money

The relationship

The country check and the decision

Why does the answer matter?

What does Teamed offer for contractors?

Where should you go next?

Where do the facts on this page come from?

Questions people ask

Print this checklist