The difference between a freelancer and an independent contractor

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Working as a freelancer or independent freelancer is not the same, although these two have plenty of things in common. Both of these work as self-employers, but the way they run their business is quite different. While freelancers usually work on specific projects, independent contractors could work for various clients, most of which are long-term. If you want to start working on your own terms, knowing the difference between these two can come in handy. Take a look at what differentiates freelancers from independent contractors.

The definition of freelancer and independent contractor

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Being a self-employed person has its benefits, but it’s not the best way to earn steady money. Since freelancers often struggle to find long-term clients, they rely on multiple sources of income. This method of earning money is similar for independent contractors, but it has a few differences. A freelancer is not an employee with a permanent job. Depending on the type of project they choose, their work is usually limited to finishing their work. Freelancers usually provide a specific service or a product (such as design or content), which they can offer to one or many clients. However, freelancers are in charge of determining their own rates, since they also choose their working hours and availability for clients. They need to pay taxes like regular employees, with a few benefits added. Most freelance workers provide services in the field of digital marketing, programming, journalism, and web development. No matter which type of work they do, they get paid by the project.

When it comes to independent contractors, these can work for a few different clients at once. Since their services are usually needed long-term, they are not paid for a finalized project. Unlike freelancers, independent contractors can work from home, but also on-site. Depending on the service they provide, they could choose different types of work environments. For example, lawyers who are self-employed are defined as independent contractors. Their services are available long-term for one or multiple clients.

What makes a person a freelancer?

In order to become a self-employed person, you will have one of two options. The first one is to look for clients you can offer your skills to and finish specific projects for them. The other option is to provide long-term service for a few clients and get paid hourly. A freelancer is a person that relies on the size and length of their projects as the determining factors regarding their income. For example, a web designer could provide a design for one client and call it a day, while a lawyer can provide legal services long-term. The definition of a freelancer lies in the following facts:

  •       Calculating and paying their own taxes
  •       Working by themselves, without employing other people
  •       Choose their rates
  •       Work on specific projects (on or a few at the same time)
  •       Choose their working hours depending on how much they want to earn

Being a freelancer has plenty of upsides, but time management is often not one of them. When working on multiple projects at once, many of them struggle to finalize tasks on time. In order to maintain their workflow and organize better, plenty of freelancers use Business Management Software. This software helps them keep track of their tasks, organize daily schedules and calculate their finances.

What is the difference between freelancers and independent contractors?

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Although both of them fall under the self-employed category, these are some of the main differences in their job description:

  • Choosing clients. While freelancers look for bigger and better-paid projects,           independent contractors prefer booking long-term clients.
  • Accepting projects. When working for a long-term client, an independent               contractor often doesn’t have the option of refusing work. Freelancers, on the other hand, choose projects that bring a bigger income.
  • Working hours. One of the biggest benefits of working as a freelancer is having flexible working hours, which independent contractors often can’t choose.
  • Choosing rates. A freelancer is a sole person responsible for the amount of money they ask for a project. Independent contractors often work on hourly rates, depending on how much they’re needed by the client.

Choosing clients and projects

One of the main differences between freelancing and being an independent contractor is the nature of their work. For example, freelancers can choose to work half-time and pick the project they can profit from. Depending on how much they want to earn, freelancers can work for one, two, or more clients at the same time. When it comes to choosing projects, freelancers choose which ones they want to accept.

On the other hand, choosing clients for independent contractors is a bit more complicated. Since it only pays off to book long-term clients, they want to book as many clients as possible. In a few words, independent contractors don’t always have a steady workflow from every client, which is why it’s hard to maintain a steady income. Choosing a project as an independent contractor can be difficult since they often have to adjust to the client’s needs.

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Benefits for freelancers and independent contractors

Working as a self-employed person has many upsides, but they’re not the same as for other employees. For example, paid vacation and health insurance are things that both freelancers and independent contractors are responsible for. Depending on their income and whether they can rely on regular payments, these people need to rely on themselves. In other words, they don’t have an employer who will pay for these benefits for them.

So, in order to be a freelancer or an independent contractor, you will have to rely on the amount of work you do. If you can maintain a steady income and rely on long-term clients or big projects, you will be able to provide these benefits for yourself. On the other hand, both freelancers and independent contractors have to pay taxes, just like regular employees. If you want to try your luck in one of these professions, make sure to do your research. Being your own boss has many upsides, but it requires plenty of responsibilities, too.

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