Is a Social Media Influencer an Employee?
Is an influencer considered an employee? In short, no. An influencer is going to have two types of employment relationships. You’re going to have a contract with your agency or manager or marketing firm. That’s one contract, and then you’re also going to have a contract with the sponsors as well. And so, I mean, sponsoring companies is a normal way of saying it. Now, your relationship with these sponsoring companies is that of an independent contractor. A normal employee would receive a W2 at the end of the year, and then they would have taxes taken out of whatever compensation they would receive. They would get benefits such as health, vision, dental, disability, life, and retirement, all of the benefits of being an employee.
However, an influencer is considered an independent contractor and would receive a 1099 at the end of the year and no taxes are taken out or withheld during the entire year. The influencer is going to be responsible for paying those self-employment taxes at the end of the year. Now, I find this is the dad in me that many influencers don’t understand the tax implications of being a 1099 independent contractor. And then they get to the end of the year, and they have an enormous tax bill and they think, oh, well, I’ve spent a lot of that money and I’m not sure what to do. So, you just need to make certain, and this is what I would suggest, is reaching out to an accountant wherever you live establishing a relationship with them and trying to find the best ways to maximize your tax deductions.
Now, most of the time, what would happen is an influencer would create an LLC. Basically, they’re their own business. They’d get a tax ID number, an EIN from the federal government, they’d create a bank account, and then they’d run all their compensation and expenses through this account. And that way, they’d be able to deduct several things that go into being an influencer like travel, and any expenses that go with it depending upon what type of influence you are, equipment, clothes, all that kind of stuff can potentially be deducted but it needs to be set up properly. Now, is there any time when you would be an employee? The answer to that is most likely no. As I said before, if you have an employment relationship with somebody, you are an actual employee, you’re likely working a nine to five full-time job. Other topics of interest include:
Whereas most of the time, as an influencer, you’re just kind of coming in, endorsing a product coming out, or maybe you have a year-long relationship where you’re required to do. If you’re on YouTube, maybe you’re required to do a 90-second spot once a month for a company, that type of thing, but it’s not an ongoing employment relationship. It’s just a straight-up independent contractor relationship between the sponsoring company and the influencer. Well, hopefully, that was helpful and that’s kind of whether influencers are employees, and the answer is no, they’re very likely not.
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