What is a Contractor?
Contractors are people who are in business for themselves. Contractors earn their livelihoods from their own independent business and do not depend on an employer for remuneration. They are sometimes called consultants or freelancers, or entrepreneurs. The difference between a contractor and an employee is the relationship they have with the firm. An employee has a contract of service with the firm while a contractor has a contract for service. This is the basic difference.
Who is the one who Employs?
The employee is employed on the firm’s behalf, while the contractor is employed on their own behalf. Contractors are self-employed people who establish their own businesses and who provide their own products and services to customers and clients.
One of the major differences between a contractor and an employee is how they are paid. Contractors are paid on a pre-agreed basis (a rate or a quote). Employees are paid according to the scale of wages or salary agreed to when they began work.
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