An independent contractor works for themselves, delivers a defined scope, and handles their own taxes. Engaging one is fast and flexible. The risk is getting the classification wrong.
Key facts
- An independent contractor is a self-employed worker engaged to deliver a defined scope of work, responsible for their own taxes and not classified as the client's employee.
- ICs include freelancers, consultants, and sole traders.
- In the US, an IC is usually documented on a 1099 rather than a W-2.
Contents
- What is an independent contractor?
- Independent contractor vs employee
- How to engage an independent contractor compliantly
- Frequently asked questions
- Engaging independent contractors at scale
What is an independent contractor?
An independent contractor is a self-employed worker engaged to deliver a defined scope of work, responsible for their own taxes and not classified as the client's employee. They control how they work and typically serve multiple clients.
Independent contractor vs employee
An employee is on payroll, has tax withheld, and receives benefits and protections. An independent contractor invoices for work, handles their own taxes, and is engaged for a defined scope. Which one applies is decided by worker classification, not by the label on the contract.
How to engage an independent contractor compliantly
- Classify first. Confirm the worker is genuinely independent before work starts.
- Contract the scope. Deliverables, timeline, and payment in writing.
- Collect tax documentation. Right forms for the market up front.
- Pay against invoice. In local currency, on time.
Key takeaway: The speed of engaging a contractor is only an advantage if the classification holds up. Misclassification undoes it.
Best practice: Engage contractors through a system that classifies and stands behind the result. Worksome onboards and pays independent contractors compliantly, in days, and can act as AOR to carry the risk.
Frequently asked questions about independent contractors
What is the difference between an independent contractor and an employee? A contractor is self-employed, invoices for work, and handles their own taxes. An employee is on payroll with tax withheld and benefits. Classification decides which applies.
Are freelancers independent contractors? Yes. Freelancer is the everyday term for an independent contractor.
Who is responsible for an IC's taxes? The contractor handles their own taxes. The company must still classify them correctly.
Engaging independent contractors at scale
Independent contractors are the fastest way to bring in skills, as long as classification and pay are handled properly. Worksome runs both, across 150+ countries.
This page is general information, not legal advice. Classification rules vary by country and change over time. Confirm your specific situation with qualified counsel.
Related: Freelancer, Worker classification, 1099 vs W-2, Agent of Record (AOR).