Determine if a worker should be an employee or contractor — IRS 3-factor test (SS-8).
This tool provides general guidance only and is NOT a legal determination. Worker classification depends on the totality of circumstances and varies by state. Some states (like CA with AB5) use stricter tests. Always consult an employment attorney.
The IRS and Department of Labor classify workers with a totality-of-circumstances test, not a single checklist item. The IRS common-law test has three categories — behavioral control (does the company direct how, when, and with what tools work happens), financial control (can the worker invest, profit, or lose money), and the relationship type (permanence, benefits, dismissal) — historically expanded into the familiar 20-factor test cited on Form SS-8. This tool scores twelve indicators with a weighted formula, employeeScore = behavioral × 0.4 + (10 − financial) × 0.3 + relationship × 0.3, and maps the result to a classification. The stakes are real: misclassifying a worker can trigger back taxes, unpaid benefits, and penalties under IRC §3509.
Each indicator is scored 0-10, averaged within its category, then combined with fixed weights. The sample scores behavioral 7.5, financial 4.0, and relationship 7.25 — producing a 70/100 employee score that reads as likely employee. California and other states layer stricter tests (e.g. AB5) on top of the IRS framework.
Priya designs graphics full-time for one startup. The studio sets her hours (8/10), supplies equipment (7), fixes the schedule (9), and directs tasks (6). She has little investment (8), few other clients (2), an ongoing relationship (8), and receives benefits (6).
Employee or contractor? Answer questions, get your IRS 20-factor classification. Free.
The Worker Classification Checker scores a working relationship on the three categories the IRS uses in Form SS-8 to separate employees from independent contractors: behavioral control, financial control, and the type of relationship. You answer twelve questions on 0-10 sliders, four per category, covering who sets hours and schedules, who provides equipment, how tasks are directed, whether the worker invests money, can earn profits or losses, serves multiple clients, works on a permanent basis, and receives benefits. The model weights behavioral control at 40% and financial and relationship factors at 30% each, producing a 0-100 employee-score. Results land on a five-step scale from Independent Contractor through Ambiguous to Employee, with a misclassification risk level and a factor table. It is structured guidance, not a legal determination.
Small-business owners and startup founders deciding how to paper a new hire, gig-platform operators, and agencies that staff projects with freelancers. It also serves workers themselves: a 1099 contractor receiving company equipment, a fixed schedule, and benefits can check whether their arrangement already looks like employment. HR teams use it as a pre-audit screen before an accountant or attorney reviews the file. The questions map to the evidence the IRS and Department of Labor actually weigh, so the slider positions double as a checklist of what documentation to gather. Because states apply their own tests (California's ABC test under AB5 is stricter than the federal common-law analysis), the result should be read as the federal baseline, with state-specific review where the work is performed.
(1) Position twelve sliders, each anchored at both ends; for example, "Company sets your schedule" runs from 0 (fully flexible) to 10 (fixed schedule required). (2) The engine averages each group of four into behavioral, financial, and relationship sub-scores, then computes employeeScore = behavioral x 0.4 + (10 - financial) x 0.3 + relationship x 0.3, so strong financial independence actively pulls the result toward contractor status. (3) The score maps to five bands: 80 and above reads Employee, 60-79 Likely Employee, 40-59 Ambiguous, 20-39 Likely Contractor, and below 20 Independent Contractor. The result screen shows the three sub-scores, a bar running from Employee to Contractor, the misclassification risk level, and targeted recommendations keyed to your strongest factors.
When the checker flags high risk, meaning a score of 60 or above, it warns that IRS and Department of Labor enforcement is increasing and cites the potential bill: back employment taxes, retroactive benefits, and penalties up to $1,000 per worker under IRC §3509. Beyond federal exposure, misclassified employees can claim unpaid overtime and minimum wage under the FLSA, and state labor agencies can pursue their own penalties and unemployment-fund contributions. If the classification itself is disputed, either the company or the worker can file IRS Form SS-8 to request an official determination; the tool notes it typically takes at least six months but yields a binding ruling on the relationship. Treat a high-risk score as a prompt to consult an employment attorney before an audit forces the issue.
The IRS uses a 20-factor test across three categories: behavioral control (does the company direct how work is done?), financial control (who provides tools, sets hours, pays expenses?), and relationship type (written contracts, benefits, permanency). Misclassification penalties reach $25,000 per worker plus back taxes. Answer the factors to get your likely status.
The IRS assesses 1.5% of wages for unpaid income tax withholding, 20% of the employee's share of FICA, plus 0.5%-25% late-payment penalties. State labor departments add separate fines ($5,000-$25,000 per worker in California). This checker helps you classify correctly before an audit triggers retroactive liability.
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