Freelance Contractor: What is it and How Does it Work?
As the gig economy continues to grow, more and more people are considering freelance contracting as a viable career option.
As the gig economy continues to grow, more and more people are considering freelance contracting as a viable career option. But what exactly is a freelance contractor, and how does it differ from other types of freelancers? In this article, we'll explore what a freelance contractor is, the benefits and drawbacks of this career path, and how it compares to other types of self-employment.
What is a Freelance Contractor?
A freelance contractor, also known as an independent contractor, is a self-employed professional who works on a project-by-project basis for clients. Unlike traditional employees, freelance contractors are not considered employees of the companies they work for, and are responsible for paying their own taxes, securing their own insurance, and managing their own finances.
Freelance contractors typically work on short-term projects, and are often hired to complete specialised tasks that are outside the scope of a company's regular employees. For example, a company might hire a freelance contractor to design a new website, write a series of blog posts, or create a custom software application.
The Benefits of Freelance Contracting
One of the biggest benefits of freelance contracting is the flexibility it offers. Freelance contractors have the ability to set their own schedules, choose which projects they work on, and negotiate their own rates. This makes it an ideal career choice for people who value autonomy and independence.
Another advantage of freelance contracting is the potential for higher income. Because freelance contractors are responsible for setting their own rates, they have the ability to earn more money than they would as traditional employees. Additionally, freelance contractors can often take advantage of tax deductions that are not available to traditional employees, which can help to further increase their take-home pay.
The Drawbacks of Freelance Contracting
While freelance contracting offers many benefits, it is not without its drawbacks. One of the biggest challenges of freelance contracting is the lack of job security. Because freelance contractors work on a project-by-project basis, they may not always have a steady stream of work. This can make it difficult to plan for the future and can lead to financial instability.
Another challenge of freelance contracting is the administrative burden that comes with being self-employed. Freelance contractors are responsible for managing their own finances, securing their own insurance, and paying their own taxes. This can be time-consuming and may require additional expertise that some people may not possess.
How Freelance Contracting Compares to Other Types of Self-Employment
Freelance contracting is just one of several ways to work for yourself. Other common forms of self-employment include starting a business, becoming a consultant, or launching a startup. While there are similarities between these different types of self-employment, there are also key differences.
For example, starting a business typically involves creating a product or service and building a customer base, while freelance contracting is more focused on completing specific projects for clients. Similarly, becoming a consultant often involves providing advice and guidance to clients, while freelance contracting is more focused on completing specific tasks.
Lancr: A Better Way to Pay Your Freelancers
If you're a freelance contractor, or if you work with freelance contractors, you know how important it is to get paid on time and to avoid unnecessary fees. That's where Lancr comes in.
Lancr is a platform designed to make paying your freelancers easy and affordable. With Lancr, you can save up to 75% in fees and 2 hours a week paying your freelancers. Our smart payment routing ensures that your freelancers get paid quickly and securely, while our easy-to-use time tracking and approval system makes it easy to track hours and manage payments.
Conclusion
Freelance contracting can be a rewarding and lucrative career path for those who value flexibility and autonomy. While there are challenges associated with this type of self-employment, the benefits often outweigh the drawbacks. And with platforms like Lancr making it easy to manage payments and track hours, there's never been a better time to become a freelance contractor.