About the author

Darren Cronian, the author of this guide, has spent eight years securing remote jobs and building a successful freelancing business. His goal is to help people escape the office. Read more >

While chatting with a client, they asked me the difference between a contractor vs. freelancer. Having experienced being both, it is an excellent topic to create a guide to help those struggling to make a decision.

Contracting was my choice because I sent an invoice, and the company would pay me on the same day every month.

The company should include the payment date and rate of pay in your contract. This makes managing your money much more straightforward.

Contractor vs freelancer: what's the difference?

As a freelancer, you never know how long a client will process the invoice, so you have to manage your money better and chase invoices.

What are the differences?

Straightaway, the most significant benefit of freelancing and contracting is that you can work from home and are often not expected to commute to an office. This is a considerable benefit over being an employee.

Contracting and freelancing are two different ways of working as independent professionals. Still, they have some significant differences if you consider them before deciding the best option.

Contractor vs. Freelancer

One of the main differences between contracting and freelancing is the nature of the work itself.

Contractors are typically hired to work on specific projects for a set period. In contrast, freelancers are usually hired per task and have more flexibility when and how they work.

For example, a contractor will be hired by a company to work on a software development project for a few months, while a freelancer might work on various tasks for different clients, such as writing articles, designing websites, or creating social media content.

Another critical difference between contracting and freelancing is how the work is organized and managed.

Companies or organizations typically hire contractors to work on specific projects and are expected to follow the hiring entity’s rules and guidelines. This can include working hours, deadlines, and the project’s scope.

On the other hand, Freelancers have more control over their work and how they complete it. They are responsible for finding their clients, negotiating their rates, and managing their schedules.

Freelancers have more flexibility and autonomy but are responsible for finding their work and managing their businesses.

Taxes and Benefits

Contractors and freelancers are considered self-employed, responsible for paying their taxes, and not eligible for traditional employee benefits like health insurance or retirement plans.

Also, they need to be proactive about setting aside money for taxes and ensuring they have the necessary insurance and other benefits.

Understanding the tax implications and seeking out the essential resources to ensure that you are adequately protected is critical.

Choosing the Right Approach

Ultimately, contracting and freelancing depend on your goals, needs, and preferences. If you are looking for stability and the opportunity to work on long-term projects, contracting might be your better option.

On the other hand, freelancing might be better if you prefer the flexibility and autonomy of working on your terms.

Bear in mind that as a contractor, companies are looking for professionals happy to work on long-term contracts.

On average, my contracts have lasted 12-24 months, and I could have stayed longer had I not decided to move on.

Regardless of which approach you to select, it’s essential to understand the difference between contracting and freelancing and be aware of each approach’s pros and cons. Make an informed decision and set yourself up for success as an independent professional.

Hopefully, this has given you an understanding of the difference between a contractor vs. freelancer.

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