Contractor vs Employee

15th November 2018

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So, you’re thinking about becoming a contractor, but you’re unsure of how a contracting position differs from being an actual employee.

You’ve probably heard that you’ll see a significant increase in your earnings and you’ll have more control over your weekly schedule. This is true!

But what about your responsibilities and liabilities? How will these be affected?

This depends on several factors.

The company and position

Some roles are better suited to a contractor, and others are a better fit for an employee. It depends on the particular position and company.

A contractor usually has a specific job description, and their success is commonly based purely on the task or project they are performing. They are often experts in their field or offer a unique and highly desirable skill.

An employee is much more involved in other aspects of the company and often has expectations they need to fulfil. Such as attending events outside of work hours or travelling to workshops and seminars. There is also more emphasis placed on the employee’s responsibility to contribute to the company culture and be a team player.

Work hours

Some contractors can still be managed on a daily basis and be expected to work from the company office Monday to Friday. However, others have the opportunity to choose their own hours and work remotely.

Traditionally, employees are expected to work set hours from the workplace. Although, we are starting to see a shift in this, with employees more commonly allowed to work from home and follow flexible working hours.

Either way, as a contractor you have much more control, and you have the option to negotiate the daily expectations and adjust your schedule.


As a contractor, one thing that you are always responsible for is your finances, including your taxes, and filing to HMRC. It is up to you, as the contractor to decide to either take care of this yourself, outsource the tasks to a service provider for a fee or hire a personal accountant.

As an employee, these administrative tasks are taken care of for you. While employed, each payday, money will simply appear in your bank account!

Although there is often more admin involved, most contractors believe it’s still a more beneficial situation due to the higher earning potential.


In most cases, a contract has a start and an end date. The duration of a contract will always vary depending on the task and the company, the length can span from a couple of months to several years.

As an employee, you usually don’t have a set end date. Once you’re employed, you can remain within the position until you decide to move on or are let go by the company.

Many people enjoy the security that comes with being an employee; however, contractors often say they prefer the variety, flexibility and earning potential that comes with contracting.

As you can see, there are many differences between being an employee and a contractor. When deciding if contracting is right for you, it’s important to weigh up the pro’s and con’s that are specific to you and your personal needs.

For more information, check out our Contracting Guidebook 101: