SaaS Sales Contractor Evaluation Form

Before you bring on a part-time sales rep as an independent contractor, you need to make sure that classification holds up. Misclassifying an employee as a contractor creates real legal and tax exposure.

This form is a foundational evaluation framework to help you think through the contractor classification question. It is not legal advice - consult a tax attorney and reference the IRS definition and test before making any final determination.

SaaS Sales Contractor Evaluation Checklist

Work through these 18 questions when evaluating a potential or existing part-time SaaS sales hire.

Client Representation and Work Scope

1. Does the individual identify themselves as a representative of your company when working with prospects and clients?
2. Does the individual have freedom to hire their own support staff without requiring your approval?
3. Would the individual be reimbursed for expenses that weren’t pre-specified in the engagement?

Company Resources Provided

4. Are you providing a dedicated desk or office space?
5. Are you providing a telephone extension on your company phone system?
6. Are you providing a company email address?
7. Are you providing computer equipment or other hardware?
8. Are you providing business cards with your company name?

Work Flexibility

9. Is the individual permitted to work for competing companies simultaneously?
10. Does the role require a skill level that necessitates company-provided training before they can perform the work?
11. Can the engagement be terminated by either party without financial liability beyond work already completed?
12. How many independent clients does the individual currently have? (0 / 1 / 2 / 3 or more)

Payment and Schedule

13. How is the individual paid? (Hourly / Milestone-based / Other)
14. Are there minimum weekly hour requirements written into the engagement?
15. Are there regular reporting requirements (weekly check-ins, status updates, etc.)?
16. Are detailed instructions provided on exactly how the individual should deliver the service?
17. Does the individual have flexibility over their own schedule and working hours?
18. Has this individual previously been a W-2 employee at your company?

Additional Factors

• Can the individual perform the work remotely without being on-site?
• Does the individual have meaningful financial risk exposure in this engagement (e.g., they could lose money if the project goes poorly)?

How to Use This Form

There’s no single answer that automatically makes someone a contractor or an employee. The IRS uses a totality-of-the-circumstances analysis that considers behavioral control, financial control, and the type of relationship.

As a rough guide:

• More contractor indicators: permitted to work for competitors, no company resources provided, milestone-based pay, multiple independent clients, flexible schedule, no minimum hours
• More employee indicators: company email and equipment provided, detailed instructions on how to work, required weekly hours and reporting, prior W-2 history at your company

If your answers are skewing toward the employee column, talk to a tax attorney before proceeding. The cost of that conversation is far less than the cost of a misclassification audit.

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Related resource: For help selecting legal counsel, see our guide to the best SaaS contract lawyers - featuring nineteen SaaS contract attorneys and platforms.

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