Differentiate between ‘Contract of Service’ VS ‘Contract for Service’

When providing an employment contract to staff or contractors, the differentiation between a 'Contract of Service' and a 'Contract for Service' hinges on the employment or service arrangement and the relationship between the involved parties.

	Contract of Service	Contract for Service
Definition	The employee follows the employer's guidance & instructions in carrying out their work.	The service provider who is providing services to clients
Relationship	Employment	Contractor
Level of control	Working hours are specific	No specified working hours
Remuneration	Wages	Service fee per job basis
Contribution	- Paid leave - EPF / SOCSO / EIS / HRDC - Compensation & allowance - Insurance & other benefit	- NIL
Substitute Staff
The Employment Act
Tools Provide
Risk share	Share profit but no risk	Share profit and risk
Tax payable	By employer	Own responsible for own tax

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