Introduction

Whether you want to become an independent professional or are looking to hire one, make sure you know how freelancing is different from contracting. Freelancers work on their own terms, creating their schedules and finding clients. Contractors have fixed-term contracts through their employer or a third-party agency. Both freelancers and independent contractors are self-employed, which gives them more control over their work, but several key differences separate the two types of employment. Many people find that freelancing or independent contracting offers more flexibility and better suits their lifestyle than being full-time employees. Companies can use independent professionals to broaden their talent pool, hire experts for projects, and save resources. This article will help you understand the difference between freelance vs. contract work, from general overviews to pros and cons, so you can figure out what type of role fits your career path or hiring needs.

Freelance work: flexibility and independence

Freelancers are independent professionals who provide their services to individual clients through platforms or an individual company directly. Unlike employees, freelancers typically work for more than one client and do specific jobs, like writing articles or creating brand logos. Freelancers charge hourly, by the project, or work on a retainer for set deliverables. They are not locked in to long-term contracts and have the ability to choose not to work for certain clients if they want.

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Freelancers allow companies to scale up and down as needed, fitting their specific hiring needs. They can hire the expert talent they need for their projects without having to fill entire roles. Companies are relying more on remote freelancers than they did in the past. Midsize companies will rely on remote freelancers the most, with more companies planning to use more remote freelancers.

A client may need only a single project, like a website or a certain number of social media posts, but if the client enjoys working with a freelancer, they may decide to offer more work. Depending on the types of services a freelancer offers, they may do a lot of one-off projects, such as crafting a resume, setting up a Shopify site, or providing ongoing work for a client, like doing data entry or creating social media ads.

Benefits of freelancing 

1. Niching

Freelancers can choose a specialty and become experts at a skill or service, making it easier for clients to know what to hire them for.

2. Work opportunities

Clients need freelancers across many different industries, which allows freelancers to work with a variety of different clients and experience a mixture of subject matter projects.

3. Creativity

Clients determine the deliverables, but freelancers have control over their work processes, including how and when they work.

Downsides of freelancing

1. Stability

Freelancers may not always work 40 hours a week and have gaps between clients, which can make income less steady or predictable.

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2. Finding work

Freelancers have to actively pitch their services to clients, either using a platform like Upwork or finding clients directly–these are unpaid hours.

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3. Benefits

Clients don’t provide benefits to freelancers outside of optional performance bonuses; freelancers are responsible for their own healthcare, retirement planning, and other typical employer-provided benefits.

Contract work: stability and commitment

Contractors are independent professionals who provide their services to a client for a fixed-length contract that can be full or part time. Companies hire independent contractors to do a specific job over a set period. Like freelancers, contractors have a particular set of skills, but their skills are often broader and more position-based.

The main difference between freelance and contract roles is that contractors typically work for a single company for the duration of their contract. Independent contracting is a great way to gain experience and get your foot in the door at a company where you might like to be a full-time employee eventually.

Some independent professionals prefer working on contracts for stability, and if the contract isn't full time, they can freelance on the side. 

Compared to freelancing, which is remote unless presence in a specific location is necessary, companies can require independent contractors to work on-site and set specific working hours if relevant to the job.

Many companies open contract roles to test-drive positions that may become full time down the road. A big tech company may open a new role, start it as a six-month contract, and give a full-time offer after the contract ends.

Contracting is also popular when departments haven’t finalized budgets yet but need to fill a role urgently. Independent contractors can work full time but do not legally require benefits in most cases as an employee does. Some companies give certain benefits to full-time contractors to attract top talent.

Let's say the marketing department needs a new graphic designer but doesn't have the budget secured or the approval for a full-time hire. They could agree to a three- or six-month contract and then offer a full-time position at the end of the contract once they have the budget secured.

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Benefits of Contract work

1. Longer contracts

Independent contractors typically work on longer contracts that could be anywhere from a month to two years, offering more income stability.

2. Benefits

Depending on state and local laws, independent contractors who work full-time hours may be able to receive benefits like health care and paid time off.

3. Full-time opportunities

After the contract ends, companies may choose to hire their independent contractors as full-time employees.

Downsides of freelancing

1. Commitment

Unlike freelancing, which allows you to work with multiple clients at once and on one-off projects, contractors commit to their clients for the duration of the contract.

2. Work gaps

Contractors may have longer gaps between contracts since they typically work for a longer term with one client at a time.

3. Scope of work

Rather than being specialists, contractors may fill broad roles and need to have a wide skill set to match the comprehensive scope of work.

Key differences between freelancers and contractors

Freelancers and contractors are both independent professionals but work on different types of projects and contracts. Compared to independent contractors, freelancers are often more highly specialized, often experts in their field. Instead of offering a wide variety of services, they choose just a few and work hard to be the best. Companies hire freelancers to fill skill gaps on their teams and to help with projects. Contractors, on the other hand, may work full time for a single client on a long-term contract, filling a specific role.

1. Schedule

One of the main reasons workers turn to freelancing or contracting is control over their schedules. Freelancers submit proposals and accept or decline client projects based on their workload. They decide what projects to take on and when they're working. Freelancers can get paid hourly and track and submit their hours, but while a client could propose a job that requires set hours, it's up to the freelancer to accept. Depending on the contract, an independent contractor may only work for a single client and need to be available during business hours to attend meetings or interact live on project activities.

2. Hiring process

Clients can book a freelancer's services in various ways. A freelancer could submit a proposal for a job and have it accepted without an interview, just a few messages back and forth, or it may be a more formal process with multiple video interviews. Companies looking to hire freelancers can use a platform like Upwork to post jobs and find the perfect candidate. Independent contractors often fill specific roles, and the engagement is typically longer term and more hours. Hiring a contractor can feel more like conducting an employee interview and take longer to onboard and create a formal contract. Businesses may need to work through an agency to handle the logistics of hiring independent contractors, which can add extra steps and costs.

3. Kind of work

Freelancers are highly specialized experts in their fields. Businesses work with freelancers to fill specific skills gaps. Independent contractors are more likely to engage in a role than to be hired for a one-off or short-term project. A company might hire an independent contractor to be a full-time social media manager for three months or a freelancer to create three months' worth of social media content. Depending on the work a freelancer does, they may work only once with clients who don’t have repeated needs for the service.

4. Way of working

Both freelancers and independent contractors control how they get their work done. Compared to freelancers, who work remotely unless they must go on-site or travel for the project, some independent contractors are on-site part time or even full time. Because freelancers typically work for multiple clients at once, having a schedule full of on-site meetings would be difficult. Independent contractors, unless they have a part-time contract, typically work for only one client at a time and can dedicate all of their workweek to that client. A company may need someone in-office, at the front desk, during the company's working hours from nine to five Monday through Friday to answer customer calls or provide tech support – this would be an independent contractor. While independent contracting can be remote, some contracts require being on-site to use company tools. The same company could want a new website and look into hiring an outside developer. If the job is remote and the talent can determine how and where they work on it as long as they meet their deadlines – this would be a freelancer.

5. Rates

The rates and how payment works for an independent contractor vs. freelance depend on whether a platform or agency is involved. Many independent contractors choose to work with an agency. The company will first talk with the agency to determine the contract's budget. The rate is established before the agency or company posts the job. Freelancers set their rates and often submit proposals to clients through different platforms or directly pitch their services to prospective companies. When companies use platforms like LinkedIn, they can put a target range for the hourly or project rate. Then, freelancers can submit their proposals with what they think is fair to charge based on their experience, expertise, and understanding of competitive pricing for these types of services. A freelancer's rate may change from project to project depending on what's needed, but freelancers often have an average rate they use as a baseline.

6. Length of project

Compared to an independent contract with a set start and end date (which can be extended or transitioned to contract-to-hire), freelancers generally have more flexibility and variance in the project length. Short-term and single projects are often  preferable to freelancers who work with multiple clients. Contractors give all of their time (or a significant portion of their working hours) to a single client and may prefer the security of a longer contract so they don't have to seek out new projects and actively queue clients. Typically, companies turn to independent contractors when they know they need longer-term engagement, anywhere from three to six months or up to two years.

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Conclusion

Freelancing and contracting provide benefits like remote work, multiple clients, and varied projects. However, work isn’t always guaranteed, and perks like insurance and paid vacations aren’t provided. If you’re considering transitioning from salaried employment to independent work, it can be challenging, but many people have inspiring success stories after switching. We recommend taking on smaller gigs as a side hustle before jumping into freelancing or contracting full-time.  Once you’ve worked on a few projects, create a portfolio to put all your achievements in one place. Visual web development platforms like Webflow have all the tools, tutorials, and inspiration you need to build an online portfolio to kickstart your freelancing career.

Frequently asked questions (FAQs)

1. Who are freelancers?

Freelancers are independent professionals who provide their services to individual clients through platforms or an individual company directly. Unlike employees, freelancers typically work for more than one client and do specific jobs, like writing articles or creating brand logos. Freelancers charge hourly, by the project, or work on a retainer for set deliverables. They are not locked in to long-term contracts and have the ability to choose not to work for certain clients if they want.

2. What are the benefits of freelancing? 

• Niching
• Work opportunities
• Creative freedom

3. What is contract work? 

Contractors are independent professionals who provide their services to a client for a fixed-length contract that can be full or part time. Companies hire independent contractors to do a specific job over a set period. Like freelancers, contractors have a particular set of skills, but their skills are often broader and more position-based.

4. What are the benefits of contract work?

• Longer contracts 
• Workplace benefits
• Scope of full time opportunities 

5. How is freelancing different from contract work?

Freelancers and contractors are both independent professionals but work on different types of projects and contracts. Compared to independent contractors, freelancers are often more highly specialized, often experts in their field. Instead of offering a wide variety of services, they choose just a few and work hard to be the best. Companies hire freelancers to fill skill gaps on their teams and to help with projects. Contractors, on the other hand, may work full time for a single client on a long-term contract, filling a specific role.