Freelance vs Contractor: Understanding the Differences
When it comes to working with independent professionals, there are two main categories to consider: freelancers and contractors. While these two terms are often used interchangeably, they actually have distinct differences that can impact your business
When it comes to working with independent professionals, there are two main categories to consider: freelancers and contractors. While these two terms are often used interchangeably, they actually have distinct differences that can impact your business. In this article, we'll explore the differences between freelancers and contractors, including their legal status, working arrangements, and more.
What is a Freelancer?
A freelancer is an individual who offers their services to multiple clients on a project-by-project basis. They are typically self-employed, and work as independent contractors. Freelancers have a high degree of flexibility in terms of their work schedule and the clients they work with. They are often hired to complete specific projects or tasks, and may work remotely or on-site.
What is a Contractor?
A contractor, on the other hand, is an individual or company that provides services to a client under a contract. Contractors are often hired for longer-term projects or ongoing work. They may work on-site or remotely, and may work as part of a team or independently. Contractors may be hired through an agency, or may work directly with the client.
Legal Status
One of the main differences between freelancers and contractors is their legal status. Freelancers are self-employed, and are responsible for their own taxes and insurance. They are not entitled to benefits such as sick leave or vacation time. Contractors, on the other hand, are often considered employees of the company they work for, and may be entitled to benefits and protections under the law.
Working Arrangements
Freelancers have a high degree of flexibility when it comes to their working arrangements. They can choose when and where they work, and are not tied to a specific schedule. Contractors, on the other hand, may be required to work specific hours or be on-site at certain times. They may also be required to work as part of a team, rather than independently.
Payment
Both freelancers and contractors are typically paid on a project-by-project or contract basis. Freelancers may charge by the hour, project, or day. Contractors, on the other hand, are typically paid a fixed fee for the duration of the contract. They may also be paid in instalments as certain milestones are met.
Lancr
If you are looking to work with freelancers, Lancr is a great platform to consider. With Lancr, agencies can save 75% in fees and 2 hours a week paying their freelancers. We make paying your freelancers easy, with smart payment routing and easy to use time tracking and approvals. By using Lancr, you can save time and money when paying your people.
Conclusion
In conclusion, while freelancers and contractors may seem similar, there are distinct differences between the two. Freelancers are self-employed and offer their services to multiple clients, while contractors work under contract for a specific client. They also have different legal statuses and working arrangements. Understanding these differences can help you determine which type of independent professional is best suited for your needs.