Scaling Your Business: When to Hire Your First Employee vs. Contractor

The Critical Scaling Decision

As your business grows, you'll face a pivotal question: Should your first hire be an employee or a contractor? This decision has profound implications for costs, flexibility, culture, and legal compliance.

The True Cost Comparison

Employee Costs (Beyond Salary)

• Base Salary: $50,000/year (example)
• Total: $72,825-$90,825 (145-182% of base salary)

Contractor Costs

• Hourly Rate: $75/hour × 2,000 hours = $150,000
• Total: $150,000