Independent Contractor Agreement Template
Looking for a free Independent Contractor Agreement template? Then look no further. You’ll find one here. Our team has crafted an Independent Contractor Agreement template that will help you create a contract between yourself and your client.
Free Independent Contractor Agreement Template Samples
What is an independent contractor?
What is the difference between an independent contractor and an employee?
Choosing between hiring employees or independent contractors is an important decision that defines not just working relationships, but taxation as well. How workers are classified is determined by the amount of control an employer exercises over their work. In an employer-employee relationship, the employer typically controls all of the following factors:
- Where the work is done, either at the workplace itself or another location.
- The hours during which the work is done.
- How the work is done.
- Mandatory attendance at meetings and other functions.
- Use of equipment owned by the employer and provided to the employee for work purposes.
Independent contractors are not typically subject to the same level of control by the hiring client. They usually set their own hours, have their own process for completing projects, and own their own equipment. Independent contractors don’t receive company benefits, such as paid holidays and vacations, paid sick days, and health insurance. The expense of having to pay for these benefits out of pocket are often factored into the contractor’s rates
You should also be aware of tax treatment differences between employees and independent contractors.
- You must withhold state and federal income tax.
- You must withhold Social Security tax.
- You must withhold Medicare tax.
- You must pay Unemployment tax on wages.
- You must complete a W-2 form for each employee.
For independent contractors:
- Employers do not have to worry about the above tax issues for employees. Independent contractors handle taxes related to social security, medicare etc.
- Employers have to produce a W-9 to be completed by the independent contractor.
- You may have to file information returns (form 1099-MISC) to report certain types of payments made to independent contractors. Generally, any payment in excess of $600 will require a 1099-MISC form.
What is an Independent Contractor Agreement?
An Independent Contractor Agreement is a written contract that spells out the terms of the working arrangement between a contractor and client, including:
- A description of the services provided
- Terms and length of the project or service
- Payment details (including deposits, retainers, and other billing details)
- Confidentiality, non-solicitation, and dispute resolution clauses
Independent Contractor Agreement is also named as Independent Contractor Contract, Freelancer Contractor Agreement, Contract Labor Form
Why do I need an Independent Contractor Agreement?
The first is that they help protect your business interests. The contract outlines exactly what work needs to be completed, when it needs to be finished and how much you are going to pay. The second is that it shields you from liability issues and helps protect your assets and proprietary information. If you are taken to court, you have the signed agreement to clearly show the judge what your expectations were. You may also need a copy of the contract if you are audited by the IRS.
If you are a freelancer, it can help you get paid should you end up in a payment disagreement. You’ll look professional if you provide a contract for your clients if they do not have one. It also shows that you are willing to commit to work and time agreements.
There are many advantages to hiring a contract worker over a regular employee, including:
- You don’t have to pay their FICA tax obligations
- You don’t have to offer health insurance or other benefits
- You only have to pay them for agreed upon work
- It is often easier to end a contract than firing an employee
- Less paperwork overall
- You don’t have to micromanage their work or schedule
Download Independent Contractor Agreement Template
What Are the Elements of an Independent Contractor Agreement?
Most independent contractor agreements include the following information at a minimum:
- Parties: The contract starts by listing all associated parties, like the independent contractor, the client or hiring company, and the contact information for each party.
- Time frame: Most contracts include specific deadlines. Depending on the scope of the project, the contract may include multiple deadlines for various work products while others might just list a deadline for the final product.
- Services: This section of the contract details the specifics of the work the freelancer will perform.
- Compensation: Depending on the type of project, the compensation section will either provide an hourly wage or the total compensation for the project.
- Confidentiality: If there are necessary confidentiality protections for the project, this clause outlines those expectations.
- Termination: Some contracts might include an “option to terminate early” clause depending on the project. Most contracts include a section that the client and freelancer initial to indicate they have completed the work and provided payment, effectively terminating the contract.
- State of governance: List the state under which the contract falls and which will enforce the specifics of the contract if necessary.
- Signatures: All parties listed at the beginning of the contract should sign and date in designated locations.
Some contracts require additional clauses and information. You can customize an independent contractor agreement to meet the specific needs of your project.
Frequently Asked Questions
FAQ about our Independent Contractor Agreement Templates
we recognize that your contract layout conditions may need to be changed to be in line together with your client’s needs. That’s why we have made Contrat in Word format as well so that you’ll be able make adjustments as you like. If you want to make important changes to the template, we propose you to get help of a lawyer or conveyancer to make sure you still have protection.
Contractors, freelancers, or consultants who wish to have a written agreement with their client can create an Independent Contractor Agreement. Likewise, customers, clients, or businesses who hire contractors and wish to outline the service arrangement through a written contract.
Keeping track of who is an employee and who is a contractor ensures a business is in a position to file taxes properly and comply with employment law.
Employers must pay a portion of payroll taxes on employees, whereas independent contractors conduct their own personal tax filings.
Confidentiality is a concern for customers who may be entrusting private or sensitive information to an independent contractor who has been hired to carry out a service for the company.
In a contractor agreement, you can include terms to prevent a freelancer from divulging information about your business. There are also terms about non-solicitation and non-competition in the event there are conflicts of interest in the industry or a risk of competition. It should be noted that if the contractor fails to comply with these terms, it would put them in breach of the contract.