Contract vs Full-Time: 10 Pros and Cons

But instead of seeing the two as different methods of hiring, it’s time to recognize them as two parts of an integrated hiring strategy for your company. There’s one option we haven’t yet discussed that could combine the advantages of contract and full-time employees without the disadvantages of either. But if you want someone who can help your contract vs full-time salary company grow into a more successful organization over a period of years, hiring full-time is almost always the best choice. If you need someone that can help your company move successfully into the future, hiring a full-time employee is often the right decision. Do you need someone who can solve similar problems for you on a long-term basis?

Self-discipline will be less of a requirement for you, so long as you can look busy or prove results while in the office. You may be able to fire some clients if the relationship is a bad match, but most of the time, you will need to accommodate their needs. Your livelihood depends on it, and there will not be a ‘middle-man’ communicating on your behalf. It may always be work time, and like a surgeon, you may be ‘on-call’ at all times.

As An Employer

Any costs incurred that can be viewed as work related, including gas, mileage, rent/mortgage (if the contractor works from a home office), computer, and cell phone can be written off at tax time. Employees, who usually have most of those things provided by the employer, don’t get the same tax breaks. Employees get their paychecks from their company, which also takes care of taxes like federal income and Medicare. Also, they often enjoy benefits like health insurance, vacation time, and sometimes even stock options. For this reason, your time frame and desired schedule may not necessarily be achievable when working with independent contractors.

Freelancers and contractors who work with your competitors can give you insights into best practices (within ethical boundaries, of course). That way, you can quickly improve yourself professionally, which will only result in better job opportunities down the line. As mentioned earlier, contractors, on the other hand, will need to take care of this on their own. The best part of being eligible for a fixed income is that it allows you to plan since you’ll know exactly when and how much you are being paid.

Contractor Salary Pros/Cons

There are numerous digital nomad insurance plans that cover you at very affordable prices. Most plans let you set your “area” so you can specify South America, versus a specific country and you’re covered if you’re based in one place and then traveling around the specified zone. Although it’s possible to get a cheap plan for $1-200/month I encourage most of my students to set aside around $500/month for health insurance in order to be on the safe side.

  • Why hire someone who might be with your company for 10 years when the project only requires six months?
  • But for someone joining your team as a full-time employee, there is more to it.
  • People have different times of the day when their body is at low energy and peak energy.
  • An employee, on the other hand, is on your team — you’re their supervisor, responsible for their behavior and also reporting their taxes.
  • Like all forms of business, contracts are adjustable, and end-dates, payment amounts, and most other factors can be adjusted in the contract at any point.

Two of the currently most popular types of employment include being hired full-time or contract work. And, of course, contractors are great for working on short-term projects. Why hire someone who might be with your company for 10 years when the project only requires six months? There’s no reason to scrounge for more projects they can work on—hire them for a short period and bring them back later if you need them. Freelance and contract workers may also not be entitled to the same rights as more permanent members of staff, although they do get to manage their own schedule, and negotiate their own terms.

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