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Definition of Independent Contractor:

Also known as Freelancers, an Independent contractor is a person who performs tasks or job for another entity as a non-employee. They do not enjoy employment benefits and are bound by a contract with the employer until they finish the task. 

Difference between Independent contractors and Employees:


Independent Contractor


Employers have a say only on the end result. They cannot choose how the contractor works, or the tools used, unless specifically mentioned in the contract. 

Employees have to work the way the employer mandates in the organization. They are bound by the policies and rules by which the organization works.

They do not enjoy the employee benefits such as Social Security, PF, or Medicare contributions, retirement benefits and so on. They have to file their taxes as sole proprietorship. 

The organization can sponsor or match the Medicare taxes and retirement contributions.

They are often geographically far away from the company they work for, and they can work with multiple companies at a time.

They are bound to work with only one organization at a time. 

They can negotiate the time and the money required for completing the task with the company, and hold the copyrights for the work they do.

They do not hold the copyrights for the work they do. It becomes a part of the organization’s work.