If you’re a Studio Owner (SO) or a teacher, there comes a time when you must decide: are you an employee or an independent contractor?
In most cases of studio owners I’ve encountered, your teachers are considered employees, not independent contractors.
However, the business of dance studios is a very diverse group when it comes to schedules and employee structures. One studio could be run like a fitness club with changing instructors and schedules, another could run year-round. Between these extremes exist a multitude of other possibilities.
And the consequence of choosing incorrectly can be costly. If you pay your employee as an independent contractor when they should be an employee, you and your teacher could owe back taxes and employment taxes, complete with interest and penalties!
Quick aside: The rules I will be discussing will apply to the United States. If you’re outside the U.S., consult with an accountant or lawyer for the laws governing your business.
Employee or Independent Contractor?
It all comes down to how much control the SO has over the employee.