Pros and Cons: Freelancer vs Contractor

Jul 17th, 2014
Pros and Cons: Freelancer vs Contractor

What is the difference between a freelancer and a contractor? What are the pros and cons?
"You're a contractor when you're getting paid and a freelancer when you're unemployed" jfrankcarr on stackexchange

The terms freelancer and contractor are often used interchangeably as they have some similarities and some differences. So we're making up the official definition in this ultimate guide, explain the difference and pros and cons to resolve this confusion once and for all. If time permits we will also add pictures. If you are a freelancer or contractor do send us your pictures at info at you know what dot com.


A freelancer is someone that does 'odd (misc.) jobs' for various clients as their main occupation. A freelancer is usually an expert at something and is used by clients for a short duration and paid a fixed amount to do a defined job. Most freelancers hop from job to job and often do multiple jobs at the same time. Freelancers tend to work out of their own home or offices.

Example: You hire a freelancer to build a website for your kids soccer team for a few hundred dollars. Other common freelance jobs include graphic design artists, blog writers, entertainers, lots of movie/TV related jobs, etc. You wouldn't be technically wrong to call the person a contractor but freelancer may be more appropriate.

Where do you find freelance jobs?
Websites like or - which cater mostly to small businesses looking for freelance workers anywhere in the world to do their projects for free peanuts cheap. Small businesses hire few contractors and would rather directly interview and hire a contractor. The costs are lower because they are doing the sourcing and hiring, but the risks may be higher as the freelancer may not have the right skill or because it is usually harder to communicate, control and hold someone accountable from a distance.


A Contractor is someone that is 'contracted' for a certain amount of time or a project and paid based on the hours worked. These jobs are typically longer duration and continous compared to a freelance gig and usually require the contractor to work at the client's office.

Example: Apple hires a test engineer to test its software prior to a new product launch. Apple hires this contractor through one of their staffing agencies. Although the contractor is working onsite at Apple's Cupertino office, they are actually on the payroll of one of Apple's preferred staffing agencies. In this case, the person is said to be a contractor at Apple (and not a freelancer).

Where do you find contract jobs?
OnContracting is one of the only sites that lets contractors look for onsite contract jobs. The other option is to post your resume on a job board and pray some good recruiters find you. Sign up here


Pros and Cons of Contracting vs. Freelancing

Pros of Contracting

  • Clients are typically sophisticated, know what they want from you and have realistic expectations
  • You don't need to spend time teaching or convincing a 'newbie non-technical' customer (although you could take advantage of them if you are the evil kind)
  • You (may) get to work with smart people, learn something, and build your resume (especially if you work for blue chip clients)
  • You get to work with people instead working from home alone. You get to chat, go out for lunch, morale events, make friends for free
  • You don't have to haggle over hours worked (you get paid 40hrs/week)
  • No need for overtime to impress bosses and you have a life outside work
  • You don't need to keep looking for projects to fill your hours
  • There's no risk of not getting paid for hours worked and you dont need arbitration to get your money for work done
  • You can go on the staffing agency's payroll to get health insurance, paid vacation, 401K
  • You can convert into a fulltime role if you impress your bosses

Cons of Contracting

  • Contract gigs are almost always onsite (you have to dress up, carry a badge and travel to the client)
  • You can only work for local companies- not great if you don't have many options
  • Typically work is 9-5, not much time for personal projects or errands in the middle of the day
  • Staffing agencies will take a cut of the client rate- (although that's no different than online marketplaces taking a cut of the bill)

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