Independent contractors

What is an independent contractor?

An independent contractor is someone who provides services to a business but is not an employee of that business. An independent contractor has their own business that supplies their services based on a Professional Services Agreement or commonly called a PSA. These services could include ad-hoc services like training or ongoing work for a day or two a week like bookkeeping, marketing, even Human Resources management.

Benefits of being an independent contractor

The benefits of being an independent contractor is that you can negotiate and choose your own hours and working conditions and claim the expenses for operating their own business.

Rather than focus solely on earning money based on an hourly rate you can also “package” your services so that your clients get a clearly defined and often fixed price while you are left to do a good job efficiently.

There is less risk for your client and you don’t have to keep watching the clock or keeping track of your time.

Benefits of hiring an independent contractor

The benefits to a business is the flexibility of the arrangement and also the simplicity in payments, receiving an invoice and job/time sheet and then paid as a creditor.

Independent contractors also tend to specialise in their chosen field so they come to the working agreement from a totally different perspective – one of being able to start doing the work and manage themselves and their goals efficiently.

This is different from the employee mentality which is often more about “here I am, what do you want me to do”

What are common roles for an independent contractor?

Professional services like design, bookkeeping, projects, building etc are ideal because they are usually on a project basis.