Difference Between Employee And Consultant - DOC Download - CiteHR
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Dear Sir, Employee is a servant to the Co. on full time basis. Whereas the Consultant job is doing specified work on contract basis. D.Gurumurthy HR/IR Consultant
Consultant Vs Employee a nice thread.
Kindly clarify whether "consultant" eligible for privilege leaves like Earned leave, Casual Leave, Sick leave, as given by company to employees? Can a "practicing Chartered Accountant" work as a "consultant" for different companies?In case he does not turn up on time during office hours, not available for statutory inspections for which he was appointed, does not take responsibility and onus on his job profile as consultant, what action we can initiate?

Dear kumar
thanks for your prompt reply, kindly clarify with the following,
i have deducted TDS only on 31.12.2011. so am liable to pay the same on or before 7 th of jan-2012 without interest right?
but i didn't pay till date hence i am liable to pay interest for the month of jan & feb-12 right?
so Rs.12360 X 1.5 % X 2 = 371/-
am i right?

Suppose we have deducted TDS from a person on date 01.01.2009 u/s 194C .As per Chart shown above payment due date for deposit is 7.02.09 and if we have made payment on 8.02.09 then Interest will be applicable from date of deduction ,as while calculating period for interest on late deposit of tds ,period prescribed for making payment to the credit of Central government is not to be excluded.so Interest period will be calculated as under.
* 01.01.2009 to 01.02.09-One month.
* 02.01.2009 to 08.02.09-part of month =one month
so interest for two month @ 1% /per month will becomes 2% ,so delay for one day cost you 2%?!!!

In the context of "accrual system" of accounting the TDS arises when you recognise the liability in your books of a/cs., whether you did pay or not. Since you mentioned "deducted on 31.12.11" the very same day liability accrued. Had you remitted by 7.1.12 there was no question of interest. Since there is delay (continuing) the interest accrues every month i.e., calendar month basis, from the date of deduction of TDS i.e. Dec.11- one month, Jan.12 one month, Feb.12 one month. For 3 months @ 1.5% p.m., or till you remit. Clear ?

Dear member
The other memebers have adequately explained the difference between a consultant and an employee. However mere designation or nomenclature will not be a determinative factor but it is the terms of your contract and the way you are treated by the employer will determine your status.
HR & Labour Law Advisor

Without verifying the terms & conditions of consultancy it is not correct to comment. However, normally there won't be formal leave or office timings for consultants unless they are required to work at your office on regular basis, for the simple reason there is no employer vs. employee relationship ( but nowadays many firms hire said to be "Consultants" to do many statutory work like PF, ESI, VAT, TDS on regular basis thou' they are not strictly 'consult' on any other matters). Strictly enforcing timings on CAs would depend on working arrangement agreed with the reporting officers/HODs and their rapport with them. If you wish to take action better consult the competent authority in your co.

Consultant is a advisory status just like Solicitor,Auditors Etc., Employee Employer relationship is Boss servant type relationship. To be a Consultant is a prestigious one , where as an employee position is one among the staff. Nowadays MNCs used to appoint Experienced Professionals as Consultants only as everybody knows to skip statutory obligations. Employee can work with only one Employer whereas Consultant can be a consultant for many concerns.
R Swaminathan

Consultant is a very vague term and defines nothing. A full time employee getting all statutory benefits can be designated as Consultant. Most of the IT companies have full time employees designated as Consultant. Now days Consultant is a designation and nothing else.

The only basis or document to deffrentiate between a regular employee and someone working as Proffesional is the employment contract.

Even court rulings are there where the court has ruled that what matter is the employees job profile for getting statotory benefits under different labor laws and not designation.

Now days it has become a fashion to designate an employee as Consultant and escape from the responsibilties of giving statutory benefits.

Because of all these manipulations by the employers, the term employee is being re-defined under different labur laws. Payment of Gratuity Act aslo re-defined the term Employee.

I have seen few employment contract letter which is contrary to the job profile given. Like employment contract letter designated someone as Consultant whereas that someone has been given not only advisory role but executive role also.

From legal point of view a Consultant can have advisory role only.



Here is an interesting list that you might find helpful when considering whether someone is employed or self-employed via a consulting arrangement. The authorities will tend to look behind the words of any contract and look at the substance of a relationship.


The following is a list of considerations when reviewing employment status.

1. Does the individual personally have to do the work or can they hire others in their place?

2. If the individual can sub-contract the work they are more likely to be self-employed.

3. Can the individual be controlled (even if that control is not necessarily exercised) as to where they work, when they work and what work they do?

4. If the answer to these questions is yes, this is a strong indication of employment.

5. Is the person recognised as being part and parcel of your own organisation? Do you have direct employees who do the same or similar work to the “self-employed” individual?

6. If so, it is very likely that you are treating the worker as an “employee”.

7. Does the individual work wholly or mainly for one organisation?

8. This is a likely indication of employment. However, a particular self-employment contract may be lengthy and involve all or nearly all of the self-employed person’s time and work. Other individuals may work for a number of persons, for a relatively short engagement each time, but each of those engagements could be as an employee. A worker could be engaged for just one day and could still be an employee.

9. Does the person provide the materials to carry out the work? Do they supply their own tools and not just the ordinary small tools that many employees provide?

10. The more the person provides and risks their own materials and resources, the more likely they are to be self-employed.

11. Does the individual control a business organisation? Are they in business on their own account? Do they pay their own workers?

12. These factors indicate self-employment. However, someone can be self-employed and still be an employee of a particular person, due to the nature of the work and the relationship between the two parties.

13. Does the person get paid for all time worked? Do they get paid by the week or the hour? Can they be paid overtime and holiday pay?

14. All these factors are strong indications of employment.

15. Does the individual tender for the job? Will they be paid the same amount regardless of how quickly or slowly the work is completed? Do they have to put incorrect work right at their own expense? How well can they profit or lose from how efficiently they work?

16. All these are good indications of a “true risk-taking self-employed entrepreneur”.

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