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Non-Employee Compensation Definition

December 31, 2015

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Term Definition
When someone performing a service or providing a product is determined not to be an employee, compensation is paid as a non-employee. This non-employee compensation occurs most frequently with self-employed individuals.

Extended Definition
You pay non-employee compensation to individuals who do work for you that are not your employees. The most common non-employee compensation is paid to the self-employed. In these situations, you report non-employee compensation on Form 1099-MISC.

Related Article:
What Is Non-Employee Compensation? – Definition and Examples

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