Personal Trainers: Independent Contractor vs. Employee

One of the MOST common questions we get from fitness business owners/managers in our mastermind group and from those who have purchased our Business of Personal Training System  is “Should I have Independent Contractors or Employees?”

Here is my answer….
Reviewing the history of the personal training industry, pretty much all of us started as independent contractors operating our personal training businesses within existing health and fitness clubs. Slowly over the years, many of these facilities decided to bring the training department in-house and make all their trainers employees. Why would they do this?

ONE: having employees brings more control and standardization to your business. It can become extremely unprofessional and confusing to the clientele when you have multiple trainers all running their own businesses within the same facility.

TWO: the IRS has very strict guidelines for professions and who should be considered an independent contractor or an employee.

Here’s what the IRS dictates –

You should have employees if:

  • Your business establishes and evaluates program recommendations and training techniques
  • Your business markets the program, books appointments and collects money
  • Your business sets policies and procedures and schedules meetings
  • If your trainers are employees, you are responsible for paying certain taxes and deducting employee tax contributions from pay checks

You should have Independent Contractors if:

  • Trainers are self-employed operating their own business
  • You cannot control program design, training techniques or administration
  • Independent contractors are responsible for their own taxes, marketing, scheduling and money collection

One thing that is important to note is that the IRS of course would like every business to have employees vs. independent contractors because they are then guaranteed to receive the accurate tax deductions. So with the IRS there is no grey area and in the event of an audit, if you are operating in the grey (ie. Well we collect the money, and they wear our uniforms but they control their own schedule), the IRS will most likely rule that they should have been categorized as employees and you will be responsible for back taxes. And we have had business owners tell us their horrible stories of this exact scenario happening and then be forced to lose their business. So it’s best to make sure you’re doing this correctly from the beginning and we would strongly encourage you to get the advice and counsel from an employment attorney in your state to guarantee everything is established legally.


Are you taking precious time out of your schedule to create policies, procedures, forms and systems?  Want more time and revenue to enjoy life and your work?  We can help!  The Business of Personal Training System has all of the forms, documents, procedures and systems you need to run a highly successful fitness business.  Why reinvent the wheel?  Take your business to the next level with the same system we use to generate $1 Million in PT revenue every year…out of our 5,000 sq ft facility!

 Want more tips for managing a successful team?  Read these blog posts about:
Team meetings that employees want to attend
Creative ways for trainers to attract new clients 

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Posted in Human Resources by Sherri | 2 Comments

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