Statutory Employees Definition

Statutory Employees

Statutory Employees Definition Statutory Employees occupy a sort of middle ground between independent contractors and regular employees. If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute ( statutory employees ) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social security and Medicare taxes , below.

If you are a classified as a "statutory employee," you will also report your income on Schedule C or C-EZ, although your employer should give you a W-2 Form that reports this income and shows that payroll taxes were withheld on it.
  • A driver who distributes beverages (not including milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.

  • A full-time life insurance sales agent whose main business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.

  • An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.

  • A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. The work performed for you must be the salesperson's principal business activity.

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