Statutory Employee


DEFINITION of 'Statutory Employee'

A class of employee that is permitted to deduct work-related expenses on Schedule C instead of Schedule A. Statutory employees are usually salespeople or other employees who work on commission.

Statutory employees are independent contractors under the IRS's common-law rules.

BREAKING DOWN 'Statutory Employee'

Statutory employees are granted a greater tax deduction for their business expenses than other employees, because Schedule C expenses are not subject to the 2% adjusted-gross-income threshold like expenses on Schedule A.

  1. Adjusted Gross Income - AGI

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  3. Schedule A

    A U.S. income tax form used by taxpayers to report itemized deductions, ...
  4. 1040 Form

    The standard Internal Revenue Service (IRS) form that individuals ...
  5. Independent Contractor

    A self-employed taxpayer that controls his or her own employment ...
  6. Self-Employed Person

    An independent contractor or sole proprietor who reports income ...
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