home Exchange rates Start your own business or work for hire. Is it possible to work and be an individual entrepreneur at the same time? Without experience it is impossible to build a successful business

Start your own business or work for hire. Is it possible to work and be an individual entrepreneur at the same time? Without experience it is impossible to build a successful business

What is work for hire?

Everyone knows the phrases “Work for hire” and “Wage worker”.

Moreover, most of us know them, so to speak, from the inside.

Most of the population earns their bread this way!

This is the most common, most accessible and, to be honest, the most complex and unpromising method for arranging your financial affairs.

Why?

In order to answer this question, I will give you all the pros and cons of this type of making money, and you can compare and draw your own conclusions.

I have already briefly touched on this topic in the article, but here we will look at all the pros and cons more thoroughly!

Positive aspects, "advantages" of being hired.

A huge number of work options in a wide variety of areas of human activity;

More or less guaranteed employment and salary;

- “social package.” (paid sick leave, accident insurance, sometimes life insurance, pension);

Paid vacation (the most pleasant plus);

- “career growth prospects”;

Apart from performing your job duties, you don’t need to be particularly stressed about anything.

I could not find a single positive aspect in hired work, although I worked in this sector for more than eight years!

If anyone knows more advantages, share them in the comments!

Negative sides, "cons" of working for hire.

In most cases, the level of your salary depends little on whether you worked 3 times better this month than last month or whether your work performance remained at the same level. Even if your salary is increased or an additional bonus is given, it is unlikely that you will receive as many times more money as you have done;

It turns out that your bonus can very easily be withdrawn from you and you will receive a salary for this month that is much less than you planned and expected! In addition, firing you is as easy as removing your bonus;

When you change jobs, there is a high probability that you will lose your “social package.” Because the fact is that all these social programs are corporate, in other words, they apply only to employees of a particular organization. If you cease to be its employee, then your social protection from this company ceases;

You can be called back from vacation at any time;

In any company there is competition between employees. The larger the company and the more significant the position, the fiercer and tougher the competition around this job. Moreover, having received the desired promotion, in addition to some increase in salary and status, you receive so many additional responsibilities, hassle, headaches and responsibility that by doing all this volume of work while running your own business, you would become a millionaire in a few years;

You cannot and do not have the right to interfere in the management of the company, determine the direction of movement, development, etc. You carry out someone else's will, someone else's orders, "pulling hot chestnuts out of the fire for someone else's uncle", you are not a free person, you work for someone, share with him your achievements, victories and successes, and most of them he receives, not You!

As you can see, there are plenty of disadvantages. I specifically printed only those that are, as it were, the direct opposites of the pros, although there are many more negative sides! If you would like to add your own “cons”, please leave them and discuss them on the comments page.

I hope now you have a general idea of what working for hire is like.

To choose it or to refuse the fate of an employee is everyone’s personal choice.

And here there is no obviously correct choice for everyone.

To each his own!

The main thing is that what you do, in addition to material satisfaction, brings mental satisfaction!

There is a great and very simple way to check if you are doing your job.

To do this, it is enough to answer two questions:

1. On Monday, do you enjoy going to work and, if the opportunity arises, do you happily and happily work on weekends?

2. Friday (the last working day of the week) is a holiday for you and you are looking forward to the weekend so that you can throw everything away until Monday with relief?

If you answered:

1. Yes!

2. No!

I am sincerely happy for you and congratulate you, you have found YOUR BUSINESS!

I wish you successful career growth!

Tell your friends and acquaintances about the article, let them express their opinion about what was written.

Employment of workers can occur in two ways - with a note in the work book, or an employment contract is concluded without registration. Both of these processes are legal and regulated by the constitution. Each of them has its own advantages and, accordingly, disadvantages for both parties, both the employer and the employee.

Recently, employers have begun to more often employ employees under an employment contract rather than under an employment contract. Workers, in turn, began to feel less protected. Absence raises doubts about the employer and does not give confidence in the future. When an employment contract is concluded without a work book, such relationships can hardly be called working.

The main difference between such a contract and an employment contract is that these documents are regulated by different laws. The employment contract is the Labor Code, while the employment contract is the Civil Code of the Russian Federation. Both documents have legal force.

Many are worried about pension contributions, that if an entry is not made in the work book, then they will not be made. The employer undertakes to make pension contributions under any terms of the contract. This is a mandatory clause; without it, employment will be illegal.

Why employers prefer this type of contract:

Place of work, materials and daily routine are established by agreement with the employee
There is no need to pay social tax for the employee
No need and vacation
You may miss out on bonus points
It is possible to be exempt from contributions to the employee’s social insurance

However, not everything is so smooth for the employer; there are also disadvantages:

The employer does not have the right to punish the performer of the work for violating the regulations.
The contractor has the right to recognize the employment contract through the court as labor
The tenancy agreement assumes equality of the parties. And they are called “Contractor” and “Customer”
You cannot hire an employee with a contract of employment

As for the employee, there are still disadvantages for him that are provided for by the Labor Code of the Russian Federation, but are not mentioned in the Civil Code. These include:

There is no provision for vacation paid by the employer.
The contract is concluded for a certain period, after which the employer has the right to remove the contractor from business. Also, the employer unilaterally has the right to terminate the contract at any time without warning.
When going on maternity leave, an employee will not receive benefits.
If an employee does not submit work on time, the employer has the right to deprive him of his salary.
If you are injured at work, the employer is not liable. There will be no payments. Moreover, sick leave will not be paid either.
There will be no additional payments beyond what is specified in the contract.
No benefits will be paid upon termination.
Experience is not taken into account.

For these reasons, workers do not seek to get a job under such an agreement. With a full social package, there is confidence that one day the employee will not be left without work and a penny in his pocket. The employment agreement is aimed at providing the employee with activities, and the employment agreement is aimed at obtaining the result of the performer’s work.

At the top is the name and number, the place in which it is located, and the exact date.
Next comes the preamble. It specifies the main aspects of the contract, provides information about the parties and the purposes of concluding the contract.
Must be indicated.
Then the types, volumes of work provided, and working conditions are prescribed.
The next paragraph specifies the amount and terms of payment.
The following describes the obligations of the parties.
Indication of the conditions under which the contract is terminated unilaterally.
The amounts and conditions of penalties are prescribed.
Information of the contractor and the customer indicating contact details.
At the bottom of the document, the parties put their signatures and seals.

In all of the above points, you need to describe each point in detail. Thus, the working conditions clause specifically indicates working hours, place, conditions of internships, training and education, and the nature of payment for the duration of the training. The payment clause must clearly indicate the payment procedure, frequency, quantity, possible incentive payments, etc.

The responsibilities of the parties involved must take into account all aspects, from presence at the workplace to the respectful attitude of superiors towards subordinates.

In addition to the listed points, the employer and employee can add additional sections as agreed upon by each other. This could be, for example, issues of providing workwear. If this document is executed incorrectly in any of the points, it will lose legal force.

To draw up an employment contract without applying for a job, the form can be downloaded on the Internet. Then it needs to be edited according to the wishes of the contractor and the customer, insert the data of the parties, print it out, put signatures, stamps and that’s it. Within three days after the conclusion of such a contract, the employer is forced to draw up and provide it to the employee for signature.

Agreement between individuals

In some cases, there is a moment when work will be performed by an individual for an individual. The law does not prohibit the conclusion of documents of this kind. Most often, employees encounter this type of contract when working temporarily or casually. The document must indicate exact numbers: the date and duration of the agreement.

In the case where the contract is concluded by individuals, then it must be registered with the executive committee.

As much contact information as possible between the customer and the contractor should also be indicated. This is necessary so that if something happens, you can find an employee or employer.

To protect yourself on the part of the employee, it is necessary to enter into an agreement with a legal entity. Then, in the event of a conflict situation, it will be easier to achieve justice. between individuals is least protected from the legal side. Because everyone is responsible for themselves.

Employment agreement between an individual entrepreneur and an individual. face

When an agreement is concluded between an individual entrepreneur and an individual, where the individual entrepreneur is the customer, there are also some nuances:

The customer may refuse to pay pension and insurance contributions
The customer may also not pay sick leave and
An individual entrepreneur can legally withhold wages
An employee who has gone on maternity leave is not retained a position and, accordingly, maternity benefits are not paid.
The customer is not obliged to provide an equipped workplace to the contractor

This document regulates the work activity of the performer for the remuneration specified in it. An individual entrepreneur reserves the right to pay additional and other incentives or not. An employer entering into an agreement with an individual is required to make tax payments on the individual’s income.

On the other hand, no one guarantees that the contractor will perform the work properly and will not unilaterally terminate the contract at any time. The employee sets his own hours and place of work. Therefore, the customer has no right to demand his presence in the office at a certain time.

In the case where the entrepreneur acts as a performer of work, the employment contract for an individual entrepreneur implies the absence of tax payments. An individual entrepreneur hired as a performer pays his taxes to the state himself. In this case, the customer exempts himself from additional deductions.

Is a working relationship valid without an entry in the work book?

The law of the Russian Federation provides that labor relations can only be established if this is indicated in the official document of each employee - in the labor contract. In the case where it is the main place of employment for the employee, he performs more than one-time work, then such labor relations are illegal without proper marks in the book. If an employee is hired under a contract to perform temporary or one-time work, or with the main place of work, then no entry is made in the employment record.

If an employee is employed full-time, even under a temporary contract, the employer is required to make an entry in the work book. If he has not done this, then the employee can safely go to the labor inspectorate against the employer’s illegal actions.

An employment contract does not provide social guarantees to the employee, but is very economical for the employer. On the other hand, in this case, no one gives the employer guarantees that the employee will properly perform his duties. Legally, such a document is valid, but does not provide labor freedom and security.

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1. Labor legislation

Whatever one may say, a person who works for hire is protected by law and the state much better than any entrepreneur. His pension is accrued, sick leave and vacations are paid, he cannot be fired without reason, and even in the event of bankruptcy of the enterprise, he will receive compensation.

2. Guaranteed salary

The salary of an employee is calculated regardless of whether the company is making a profit at the current time or incurring losses. Bonuses may be cut, but what is agreed upon in the employment contract will be paid.

3. Opportunity for change

Quitting your own business and switching to something new is not an easy task. But changing jobs and even professions is not difficult. All that holds you back is the 14 days of work required by law. We found the desired vacancy, for example in http://imperia.ru, wrote 2 applications (about dismissal and acceptance) and are enjoying the new job.

4. Professional experience

A profession acquired at an educational institution rarely meets the real requirements for a specialty in the labor market. And hired work allows you to fill the gap between academic education and the real qualifications of a specialist.

5. Experience working in a team

Real work differs from ideal work in that it is influenced by the human factor. Experience working in a team allows you to master the skills of interacting with other people and learn to find approaches to different types of personalities.

6. Management experience

If you plan to start your own business in the future, then the ability to organize work and manage a team will be your most valuable skill. It is possible to gain such experience in your business, but it can cost a lot of money. As an employee, you can learn anything at your employer's expense.

7. Useful connections

Dating and connections decide a lot in our lives. A large list of useful contacts will allow you to easily and quickly resolve many issues in the future. All you have to do is call the right person. This element will be especially useful when you plan to open your own business in the same field in which you work for hire.

8. Authority

When you have your own employees, it will be much easier for you to find a common language with them if they see you as their person. You may be the boss now, but you started out just like them, did the same things they did, and that means you understand their problems and correctly assess the opportunities.

Before becoming an entrepreneur, I myself went through the path of an employee. I had a chance to turn nuts and work with papers and manage people. The experience I gained helps me to this day; if it weren’t for it, who knows how my business would have turned out.

Surely, many have wondered more than once what to choose: working for someone else or organizing their own business? In this article I will try to compare these options and show why working for hire in our country is not profitable.

First, let's define: for what purpose does a person actually work? No matter what anyone says, there are usually only two reasons that motivate us to go to work:

Earn the necessary amount of money to live here and now.
To secure your future, in fact, to earn money for retirement and a comfortable old age.

We are accustomed to the fact that in order to achieve these goals, we must first obtain a decent education and then find a good (preferably well-paid) job. However, with the collapse of the USSR, in a market economy, an alternative option became available to us - to open our own business and go into business.

To assess possible prospects, it is necessary to consider the pros and cons of both options. Both psychological and economic aspects should be taken into account.

Psychological aspects

" Employment

Many people think that when they work for a large company, they are part of something big and benefit society. This is not entirely true. You undoubtedly bring benefits to society, but do not forget that you are working for someone else’s uncle and bringing benefit (profit) only to him. By getting a job in a company, you initially put yourself in a dependent position and, in fact, no longer belong to yourself.

At any moment, management can begin to dictate their terms, load you with additional responsibilities and demand their fulfillment. And if he is not satisfied with your work, they can easily show you the door. After all, there are more than enough people wanting to take a warm place in the office.

Another motive that encourages a person to become an employee is the desire to gain certain experience and climb the career ladder. But even here, not everything is so simple. No matter how wonderful and successful your career is, there are a number of restrictions.

Firstly, you will never rise above your boss, since it is not profitable for him, that is, you will remain a dependent employee following someone else's instructions.
Secondly, your ambitions in terms of high earnings also cannot always be satisfied, since your salary cannot grow indefinitely: at a certain point, when it reaches the established limit, there will be nowhere to grow further.

» Self-employment

Having your own business is an opportunity to work as much as you want and receive income directly proportional to the effort expended.

In this case, the amount of income depends only on you, on your capabilities and desires.

Here you will not have superiors who would indicate what, when and how to do. However, this is precisely where the biggest difficulty of running an independent business lies – organizing yourself. Without self-discipline and self-organization, you will not be able to build your own business. No one but yourself can make you work and you have to rely only on yourself. Otherwise, the business is doomed to failure.

However, this option removes restrictions - there is no pressure from above, there is no limit to self-improvement and career growth, and your potential earnings are also inorganic.

Financial aspects

" Employment

When we get a job, we receive a guaranteed salary. And this is perhaps the only plus. The employee knows in advance his salary and the minimum amount that he will receive no matter what.

However, the salary in this case is only part of the money that the employer could pay you.

You ask why? It's very simple - taxes. Have you ever wondered how much taxes you pay?, working at an enterprise or in a company? But it has long been known that employee income is the most taxable payment of all existing ones. Don't believe me? Let's do the math.

Let’s say an employer is ready to pay you 50,000 rubles for your work. From this amount, in any case, the state will withhold 13% income tax from you (6,500 rubles). Those. you will have 43,500 rubles left. Everything would be fine if not for one more but!

In addition to personal income tax, your salary is subject to another 30% additional fees (according to the latest changes in the Tax Code of the Russian Federation).

22% must be given to the Pension Fund, which is as much as 11,000 rubles.
2.9% - to the Social Insurance Fund (1,450 rubles).
5.1% - to the Compulsory Medical Insurance Fund (2550 rubles).

Those. in fact, it turns out that in addition to the wages accrued to employees, the employer must give another third of it to the state. In our example, the employer will have to pay not 50,000, but all 65,000 rubles per employee.

Due to the huge tax burden, the employee will never receive the amount that the employer is willing to pay him. Since, if he can allocate only 50,000 for wages, then the employee will receive only 35,000 rubles directly (50 thousand - 30% of contributions). At the same time, the employee will receive even less, since 13% of income tax will be deducted from him, i.e. the real salary will be 30,450 rubles.

As you can see, when working for hire, a person actually loses almost half of the money he earns, since we are deducted monthly by 43%.

Pension savings are, of course, good, but there are plenty of alternative options. But we'll talk about them a little later.

» Self-employment

When working for yourself, you depend on a variety of circumstances. You do not have a fixed salary, and the amount of earnings depends only on you: on the number of clients, your professional qualities and ability to sell yourself, your services or products. At the same time, as mentioned above, income is practically unlimited, and there is an incentive to develop and increase your income.

In addition, the tax burden on private entrepreneurs is significantly lower than on an employee. Each individual entrepreneur working on the simplified taxation system (simplified taxation system) pays 6% from the income received (or 15% of the amount of income minus expenses). At the same time, in 2012, social contributions, according to the latest changes in the Tax Code, were reduced to 20% of income received (last year contributions accounted for 26%).

That is, if an entrepreneur earned 50,000 rubles, he is obliged to pay the state 3,000 rubles of the Unified Tax ( 6% ) and about 10,000 rubles in contributions to the Pension Fund (20%).

And even then, this amount will be less. Since ~10,000 rubles is an annual amount. If you break it down over 12 months, you get a monthly deduction in favor of the pension fund of about 830 rubles.

Thus, he will have about 46,000 rubles left. And this is noticeably more than 30,000 for an employee.

But an individual entrepreneur has one more thing in this regard advantageous advantage. The Tax Code allows you to reduce the amount of tax by the amount of contributions paid to the Pension Fund.

For example, you, as an entrepreneur, earned a million rubles in a year. In this case, the tax you will have to pay will be 60,000 rubles. Let’s imagine that the amount of contributions to the pension fund for the year amounted to 10,000 rubles (I don’t write the exact amount, since it changes every year), then you can subtract these 10,000 rubles from the accrued tax amount, i.e. out of 60,000 rubles and thus, the final tax amount will be only 50,000 rubles.

As for pensions, when working for yourself, you also make payments to the Pension Fund and have the right to receive from the state in the manner established for all citizens. In addition, by working for oneself and receiving a large salary, a person has the opportunity to independently save for old age.

You can even save 10%-30% of your income every month and, having accumulated a certain amount, invest the money in certain financial instruments, a person can earn a certain amount of capital in retirement. Even the simplest method - over 20-30 or more years, with regular replenishment, will allow you to make very impressive savings.

For riskier investors, there are many other options: , non-state Pension funds, etc. There are actually a lot of options, and everyone can choose the most suitable one for themselves.

By the way, if the words listed above seem difficult for you, then I recommend studying the ““ course, which will explain the essence of these financial instruments in a simple and accessible form, help you create your own and get a much more tangible income than investing in bank deposits.

Let's sum it up

For supporters of work for hire, main argument in favor of this option is a guaranteed salary and confidence in the future. However, no one guarantees you a job for life, situations develop in different ways: you can be fired, laid off, have your salary reduced, etc. So, upon closer examination, it turns out that guarantees and stability are illusory, since a person does not belong to himself.

At the same time, with the right approach to development, your business, after a certain time, brings good returns. Yes, your business requires constant attention, control and action. It's like giving birth to a small child. If you don’t work, no one will pay you, but you get self-satisfaction from the fact that your work is appreciated, and this is a good incentive for further development.

The main advantages of working for yourself:

1) Freedom and flexible work schedule. You can choose when to work. There is no boss behind you who demands the impossible from you. You choose who to work with, what work to take on, and who not to work with. However, if you are serious about your business and want to earn a good income, then you will have to work hard. The fact that you can play the fool and do nothing, and they will pay money for it, is a fairy tale.

2) Income growth. If a person is employed, then the increase in salary depends solely on the decision of the boss (in the best case, it will be indexed 1-2 times a year). When a person works for himself, the level of income depends only on him. That is, he worked a lot and got a lot, worked a little and got little. But you won’t have anyone to blame for this but yourself. You can decide how much you want to work and earn. Based on this, you set specific goals and move towards them.

3) Professional growth. When working for yourself, you are responsible for the results of your work. This is an incentive to develop, increase productivity and quality of your work. And along with quality, income also grows.

Of course, running your own business also has some disadvantages. The main thing is that all responsibility lies with you. And at first you will have to perform a lot of responsibilities. Often, a business will take much more of your time and effort than an employed job.

It's up to you to choose! However, the advantages of private entrepreneurship are obvious, and they significantly outweigh the disadvantages. You are the masters of your life. If you are ready to take on such responsibility and start your own business, go for it.

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Dispatch

7.28 It may sometimes be unclear whether a worker is employed or self-employed; for example, some performance-based workers may be employed, while others may be self-employed. This distinction is also important when dividing the household sector into subsectors. The definitions in the SNA are consistent with the decisions of the International Conference of Labor Statisticians (ICLS) regarding definitions of the economically active population. However, for the SNA the main purpose is to clarify the nature of the employment relationship in order to distinguish between wages and other types of income. Individuals who may be classified as “self-employed” in labor statistics, particularly some owners of quasi-corporations and owners managing corporations, are considered employees in the SNA. Further discussion of the definition of human resources and related terms is presented in Chapter 19.

Employment relationship

7.29 In order for a person to be classified as employed (that is, either employed or self-employed), the person must be engaged in an activity that falls within the production boundary of the SNA. An employment relationship is formed between an employer and an employee (for example, between a business and an individual) when a written or oral agreement is entered into between them, which can be formal or informal, and is usually voluntary for both parties; in accordance with such an agreement, the employee performs work for the enterprise, for which he receives remuneration in cash or in kind. Compensation is usually based on hours worked or some other objective measure of the amount of work performed.

7.30 Self-employed are persons who work for themselves, and the enterprises they own are not identified in the SNA either as independent legal entities or as separate institutional units. This category includes individuals who are sole owners or co-owners of unincorporated businesses for which they work; members of producer cooperatives or contributing family members (for example, family members who work for free in an unincorporated business).

Persons engaged in the production of goods for their own final consumption or accumulation (on an individual or collective basis) are classified as self-employed. Although the cost of producing such products can be imputed on the basis of related costs, including estimates of labor costs, no imputation is made of the wages of those involved in the production of these products (even in the case of collective or community projects carried out by groups of people working together). . The excess of the imputed value of output over cash costs and production taxes is considered gross mixed income.

Contributing members of family businesses, including unpaid workers in unincorporated businesses engaged in all or part of market production, are also considered self-employed.

All of a corporation's stock may be owned by one shareholder or a small group of shareholders. When a corporation's shareholders are also employees of the corporation and receive compensation other than dividends for their services, they are classified as employees. Owners of quasi-corporations who work for those quasi-corporations and receive remuneration other than dividend payments are also classified as employees.

Homeworkers may be either employed or self-employed, depending on their specific status and circumstances. A more detailed description of this category is given below.

7.31 Remuneration of self-employed persons is treated as mixed income.

7.32 Students who act as consumers of educational or training services are not employees, however, if students also have a formal obligation to make a specific labor contribution to the production process of an enterprise (for example, as apprentices or similar categories of trainees and interns, student clerks, intern nurses, research assistants or teachers, intern doctors, etc.), then they are considered employees regardless of whether they receive any monetary remuneration for the work they perform or not in addition to the training received as income in kind.

Employers and self-employed without hired labor

7.33 Self-employed persons can be divided into two groups: those who have their own paid employees and those who do not. Persons of the first group are called employers, and persons of the second group are called self-employed without hired labor. This distinction is used for the purpose of subdividing the household sector into subsectors. The category of the self-employed without wage labor can be further subdivided into home workers, who enter into a formal or informal contract for the supply of goods or services to a specific enterprise, and the self-employed without wage labor, who may be engaged in either market production or the production of products for their own final consumption or accumulation.

Homeworkers

7.34 Homeworkers are persons who, by prior agreement or contract with a particular enterprise, undertake to work for that enterprise or to supply a specified quantity of goods or services to that enterprise, but whose place of work is located outside any of the establishments that make up that enterprise. The enterprise does not control the working hours of such workers and is not responsible for their working conditions, but can carry out quality checks of the relevant work. Most of these workers work from home, but may use other premises of their choice. Some homeworkers work with equipment or materials (or both) provided to them by their respective enterprise, while other homeworkers may purchase their own equipment or materials (or both). In both cases, part of the production costs is covered by the workers themselves, such as the actual or imputed rent for the premises in which they work; payment for heating, lighting and electricity; storage and transportation costs, etc.

7.35 The category of workers under consideration has the characteristics of both employees and self-employed workers. Assigning them to one category or another depends, first of all, on what is the basis for their remuneration. A distinction can be made between the following two cases, which, in principle, differ significantly from each other:

The remuneration received by the employee directly or indirectly depends on the volume of work performed, that is, on the amount of labor input in any production process, regardless of the cost of the products produced or the profitability of the production process. It is understood that with this method of remuneration we are talking about employees.

The income received by a worker is determined by the value of the products produced as a result of a particular production process for which the worker is responsible, regardless of the amount of labor invested. It is understood that with this method of remuneration we are talking about self-employed workers.

7.36 In practice, these criteria do not always make it possible to clearly determine who is employed and who is self-employed. Thus, homeworkers who use the labor of others whom they pay to do the work should be classified as self-employed owners of unincorporated businesses, that is, as employers. It is therefore important to distinguish between self-employed workers who use hired labor and those who work for hire.

7.37 A home worker is considered an employee if an employment relationship exists between him and the enterprise concerned. This presupposes the existence of an explicit or implicit contract or agreement under which such employee is paid on the basis of work performed. On the other hand, if there is no such explicit or implicit contract or agreement, and the income received by the home worker depends on the value of the goods or services supplied to the enterprise, then the worker is considered to be self-employed. This suggests that decisions about markets, scale of operations and financing are likely to be made by the self-employed homeworker himself, who is usually also the owner or lessee of the machinery and equipment with which he performs the work.

7.38 The correct classification of homeworkers is important for billing purposes. Thus, when we are talking about self-employed workers without hired labor, payments by the enterprise to such a worker are reflected as the acquisition of intermediate goods or services. For a homeworker, the enterprise's payments represent the value of the output produced, and the excess of the value of that output over the homeworker's direct costs (considered as intermediate consumption) represents gross mixed income. When he qualifies as an employee, the enterprise's payments are reflected as wages and, therefore, are paid out of the added value created by this enterprise. Thus, the classification of homeworkers determines the distribution of value added among enterprises, as well as the distribution of income between the compensation of employees and the net mixed income of homeworkers' households.