Can a Non Profit Organization Have Employees?
1. Understand the definition of employee vs. contractor. A great place to begin is making sure you understand who should be classified as an employee. People who perform services for your organization fall into one of two main categories:
Do you have to pay taxes to employees of a nonprofit organization?
For employees, nonprofit organizations have to withhold income taxes, withhold and pay social security and Medicare taxes, and pay unemployment taxes on wages paid to employees. [iv] Generally, organizations do not have to withhold or pay any taxes on payments to independent contractors.
Who is an independent contractor for a low income housing organization?
She also is to perform additional electrical installations under contracts with other organizations, that she obtained through advertisements. Vera is an independent contractor to the low income housing organization. Refer to Paying Independent Contractors if you need information on what your responsibilities are when paying contractors.
