Employees as independent contractors

There are two categories of workers that are, by statute, treated as non-employees for purposes of federal employment taxes.

1. Real estate salespersons
2. Direct sellers of consumer goods, like Tupperware, Avon, etc.

These are considered independent contractors.

Such workers are deemed independent contractors if at least 90 percent of the person's compensation is determined by their output. In other words, they are independent contractors if they are paid by commission and not a fixed salary.

They must also perform their services under a written contract that specifies they will not be treated as employees for federal employment tax purposes.