Understanding Compensation: How Do Consultant Fees Differ from Salaried Employee Pay?

Please let me know the difference between a compensation structure of a consultant and a salaried employee?

Can professional fees be broken up as a proper salary structure like Basic, HRA, DA, etc.?

Thanks

Dear Rani,

An employee gets a salary, and a consultant receives a fee for services rendered. Both are entirely different.

An employee receives an appointment letter, whereas a consultant must enter into an agreement on stamp paper.

A consultant will raise an invoice every month for the services provided, and you will pay accordingly as per your agreement, with service tax deduction.

In the case of an employee, you will deduct the income tax.

I hope that is helpful.

Regards,
Ukmitra