Contractor vs. Employee: Which Role Fits You Best in a Group Practice?
Audio Version
If you’re a therapist considering joining a group practice like Carolina Counseling Services, one of the first questions you’ll face is:
“Will I be an employee or an independent contractor?”
It’s a big decision, one that affects far more than just your tax forms. The way you work, your flexibility, your income potential, and even your clinical focus can all be shaped by this choice.
What Does It Mean to Be an Employee?
As an employee (W-2), you typically:
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Receive a regular paycheck with taxes withheld
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May have access to benefits like health insurance, paid time off (PTO), and retirement plans
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Work within set schedules and clinic requirements
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Have most administrative tasks—billing, credentialing, office management—handled for you
Pros: Stability, predictable income, administrative support
Cons: Less flexibility in schedule, caseload, and sometimes clinical approach
To take a close look into how employment status is determined, the IRS “Worker Classification 101” guide explains the legal factors that differentiate employees from contractors. While it’s written broadly, the same rules apply to mental health professionals.
What Does It Mean to Be an Independent Contractor?
Independent contractors (often called 1099 therapists) are self-employed. In a group practice setting, you may:
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Control your own schedule and client load
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Have the freedom to choose your treatment approaches
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Be responsible for your own taxes and benefits
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Typically earn a higher percentage per session than employees, but cover your own expenses
Pros: More flexibility, greater control over your work, potential for higher earnings
Cons: No employer paid benefits, responsible for your own business management
The IRS Form SS-8 includes an example involving a therapist. This real world case shows how the IRS looks at actual working relationships, not just contract language, when determining status.
Questions to Ask Yourself Before Deciding
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How important is flexibility in your schedule?
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Do you prefer stability over potential earning fluctuations?
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Are you comfortable managing your own business responsibilities (taxes, expenses, insurance)?
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Do you want more control over your clinical work, or more support from an administrative team?
If you choose the independent contractor route, remember that benefits like health insurance or retirement plans will need to be obtained privately. The IRS Publication 15-B explains how fringe benefits apply differently to employees versus contractors.
Why Many Therapists Choose CCS as Contractors
At Carolina Counseling Services, our independent contractor model offers:
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The freedom to shape your schedule
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Full credentialing and billing support we handle the insurance headaches
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A steady flow of referrals so you can focus on client care
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A collaborative environment without micromanagement