Income & Work

What Is an Independent Contractor?

An independent contractor is a self-employed person or business that provides services to clients under contract, rather than working as an employee. Contractors generally control how the work is done, use their own tools, and pay their own taxes, including self-employment tax, and typically do not receive employee benefits.

Contractor vs. Employee

Classification depends on the actual working relationship, not the job title; tax and labor authorities apply their own tests.

Pricing Work

Contractors often set rates that cover self-employment tax, unpaid time, and business overhead.

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💼 Freelance Hourly Rate Calculator Find the hourly rate you actually need to charge — it's not salary ÷ hours. Calculate → 🧾 Self-Employment Tax Calculator Estimate your Social Security and Medicare tax as a freelancer (2026 rates). Calculate →

🔗 Related Terms

Form 1099 Self-Employment Tax Estimated Taxes Billable Hours

More Income & Work Terms

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.