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Contractor vs. Employee – Why are more people choosing contracts over full-time employment?

Contractor vs. Employee – Why are more people choosing contracts over full-time employment?

November 21st, 2018

What’s the difference between being a contractor and an employee? This is a question that more and more people are asking, and that’s because the number of people contracting is on the rise, big time.

The higher earning potential of contracting is one of the top reasons people initially consider transitioning into the less conventional work style. As a contractor, your rate can be as much as double, as if you were an employee. You have the opportunity to negotiate payments, as well as take on multiple projects.

Here are some other reasons:


As a contractor, you get to choose the hours you work and the location you work from. A contractor may decide to work longer days during the week and take a 3-day weekend or start a little later on Monday mornings. This flexible structure is something that contractors love.

Traditionally employees are expected to work set hours from the company office. They usually have little control over their work schedule, which has been shown to increase stress levels significantly. However, recently there has been a shift in employee work hour expectations, with many companies incorporating flexible work hours and the opportunity to work remotely.


Contractors are often experts in their discipline and are usually hired to complete a specific project. Their focus is often purely on the task at hand.

Employees, on the other hand, are commonly required to attend events outside of work hours, and there is generally a higher emphasis on the importance of contributing to the company culture and creating meaningful relationships with colleagues.

This can be a good or bad thing. Some people enjoy the opportunity to bond with colleagues, whereas some people just want to get the job done and head home.


One thing is for sure, as a contractor, you will have an extra responsibility when it comes to your finances. It is up to you, as the contractor to decide whether you hire an accountant, or organise your payments yourself.

As an employee, as long as you’re employed, you will continue to find a sum on money in your account each payday.

The hassle-free employee option sounds very desirable. However, many contractors say the increased rate of pay, opportunity to pay less tax and ability to claim on expenses makes the extra administrative tasks well worth it.


Contracting and variety come arm-in-arm. Not only do contractors transition through jobs more quickly, but they also have the opportunity to work remotely. Whether working from a cafe, a remote workspace or from a holiday destination, a contractor can make their work environment as diverse as they like.

Employees tend to work from the same office and will often work with the same people for many years. The workplace can be a great place to form meaningful relationships, and this is often a factor that deters people from becoming self-employed.

Everyone has different values and will have various reasons for contracting/working as an employee. Contracting isn’t for everyone, but one thing we know is that it’s becoming increasingly popular and if this continues, it will potentially change the future of work

This article was written for  CMME by our partners at iContract 

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