I would add that it also takes out all of the benefits, which employers never mention. No benefits, no unemployment payments. Having hired many people over the years, I always get a kick out of this argument that they are the same. They aren't the same at all! Much easier and cheaper to hire contract employees. Much harder to get good employees. I don't hire contractors unless it really is a short term job. Contract work isn't for finding your long term employee partners. Contract work is for one-time or short term work. If I need a long term employee, I look for a long term employee and I don't pretend that I'm trying people out by using the guise of contract-to-perm.