Who handles contract workers’ payment?

Friday May 1 2020

Moses Ssesanga

Moses Ssesanga 

By Moses Ssesanga

Who is responsible for setting up salary structure of a fulltime contractor in an organisation, is it the legal team or the HR manager? If the contractor is not fine with the figures in relation to the amount of work, who do they go to? Ken

Dear Ken,
An independent contractor is a person, business, or corporation that provides goods or services to another organisation or entity under terms specified in a contract.

The contractor offers services/goods under a contract between them and the consumer of the services/goods, within the terms spelt out, such as, taxes/duties, the terms of payment, the amount and type of work, and any other such matters.

The differences between a contractor and an employee is that organisations that consume the services may pay the contractor and the employee for the same or similar work/service but do not collect income taxes (PAYE).
Contractors work for themselves and the company that consumes their services is their client.

The company has limited level of control over them. In addition the contractor is expected to use their own tools and equipment to deliver the required services. The contractor is also responsible for filing and paying their own PAYE to URA and they are not entitled to the company’s benefits. The independent contractor is paid by each job accomplished.

To determine the pay for the contractor, it is usually the function of the independent contractor, the type of services to be supplied, the department that will consume the services and the Finance department. The Legal department usually comes in to draft the contracts and advise on the ensuing legalities. In some instances the Procurement department is involved in the sourcing for the contractors.


Moses Ssesanga
Head Human Resource
NMG - Uganda