As your business grows, you don’t always need another person on payroll. You need the right person for a specific task. Someone who can jump in fast, deliver results, and leave once the job is done. That’s exactly what independent contractors do. In this article, you’ll find out:
- When hiring a contractor makes more sense than hiring an employee.
- What benefits you get as a client.
Let’s break it down clearly and simply, so you can decide what works best for your business.
What is an independent contractor?
An independent contractor is a self-employed individual who provides services to your business but works independently. You don’t manage their schedule. You don’t control how they work. You only care about the result.
Independent contractors often have specialized skills. They use their own tools and pay their own taxes, including self-employment taxes like Social Security and Medicare. They may work with multiple clients or focus on one project at a time. Unlike employees, they:
- Don’t receive employment benefits.
- Don’t have fixed working hours.
- And don’t attend your company meetings.
You sign a contract, agree on the scope and price, and they handle the rest. That’s why independent contracting is popular for specific projects or short-term needs.
How do independent contractors differ from employees?
Before hiring, it’s essential to understand the key differences between an independent contractor and a full-time employee. Misunderstanding these roles can lead to legal and tax issues.
| Feature | Independent contractor | Employee |
| Clients | Works with one or multiple clients | Works for a single employer |
| Work style | Chooses how, when, and where to work | Follows the employer’s rules and schedule |
| Payment | Paid based on a signed agreement | Receives a salary or hourly wage |
| Benefits | Doesn’t receive employment benefits | Entitled to health insurance, vacation, etc. |
| Taxes | Handles and files their own taxes | Employer withholds and files taxes |
| Tools and equipment | Uses their own tools and software | Uses company-owned equipment |
| Professional development | Manages own career growth | Receives employer-provided training |
| Relationship duration | Temporary, ends when the project is complete | Ongoing, based on long-term employment |
📌 All independent contractors are self-employed, but not all self-employed people are contractors. Someone who owns a coffee shop is self-employed, but not an independent contractor.
Why businesses hire independent contractors
1. Flexibility without commitment
With independent contractors, you stay flexible. You can scale your team up or down based on project needs. No lengthy onboarding, no long-term contracts. You hire for a specific task, and stop when it’s done.
This setup works best when you’re unsure how long you’ll need support, want to test someone before offering a full-time role, or simply need results fast, without adding to your payroll.
📌 Contractors can also be a smart transition stage – you try working together before you invest in a permanent hire.
2. Cost savings
Hiring an independent contractor is often cheaper than hiring employees. You don’t have to provide health benefits or cover Social Security and Medicare taxes. You also avoid office costs and workers’ compensation.
Most importantly, you avoid the tax obligations that come with hiring employees. Independent contractors work under a sole proprietorship or as self-employed individuals, so they handle their own tax deductions. This makes the collaboration cost-effective and optimized for tax purposes.
3. Fast onboarding
Independent contractors are ready to go. Most are used to contract work, so they don’t need hand-holding or training. You agree on the job, set the deadline, and they get to work.
You skip the long hiring processes, approval bottlenecks, and time-consuming paperwork that often slow down traditional recruitment. They come in with the right skills, deliver results, and move on to their next job.
→ Learn how to hire an independent contractor the right way.
4. Pay only for results – with a model that fits your project
When you work with independent contractors, you only pay for the work they deliver. Not for their breaks, lunch hours, or waiting time between tasks.
You also avoid the typical obligations tied to employment. There’s no need to pay for paid time off, meet minimum wage requirements, or track your contractor’s working hours. You focus on outcomes, not attendance.
Instead, you agree on a clear payment model that fits the project. This could be a fixed price per project, milestone-based payments tied to progress, or an hourly rate, whichever makes the most sense for the scope and timeline.
This makes your costs easier to control. You know what you’re paying for, and when. There’s no need to withhold taxes or run payroll. The contractor handles their own self-employment taxes and sends you an invoice.
→ Need help choosing the best payment method? Read our complete guide to paying freelancers.
5. Access top talent with specialized skills
Most independent contractors are experts in their fields. They bring specialized skills your team might not have – exactly when you need them. You get access to:
- Developers, designers, and marketers,
- Legal advisors and financial consultants,
- Writers, editors, and project managers.
They’ve worked with multiple companies, often in various industries. That means they’ve seen what works and what doesn’t. Contractors are focused. They don’t waste time in company meetings. They don’t need training. They deliver.
📌 Many businesses use contract work to solve urgent problems or test new ideas. You can hire for one particular job without committing to a full-time role.
6. Less risk, more control over budget
Working with independent contractors means fewer long-term costs and fewer surprises. You agree on the price upfront. You define what’s included. That gives you complete control over your business expenses. No need to pay for:
- Health insurance, retirement plans, or other employment benefits.
- Liability insurance, unless required by your industry.
- Office space, equipment, or software (they use their own).
Contractors are responsible for their own taxes. They manage their own insurance. And you don’t cover costs like workers’ compensation or unemployment insurance, which are required for employees.
7. Use independent contractors to test new roles
Not sure if you’re ready for a full-time employee? Hiring an independent contractor is a smart way to test the role first, without committing to traditional employment. You can:
- Start with a specific project.
- See how the person works.
- And decide later if they fit your team long-term.
This approach is perfect for growing businesses. You move fast, stay lean, and avoid overhiring. If the contractor does a great job, you can offer a full-time job later. If not, you end the project with no hard feelings – and no employment benefits to deal with.
📌 Some companies use independent contract work as a trial period before offering permanent roles. It’s lower risk, especially when you’re unsure about the long-term need.
And the best part? Contractors work like business partners. They care about delivering value because their next job depends on it.
Is hiring an independent contractor right for your role?
An independent contractor isn’t the right solution for every task. Some roles require more structure, collaboration, or long-term commitment. But for the right type of work, contractors are a smart choice.
Contractors are a great fit when you need help with a specific project that: has clear deliverables and a deadline, doesn’t depend on daily team meetings, and can be done independently, without ongoing supervision.
That’s what an independent contractor requires: freedom, clarity, and mutual trust. You define the project, the scope, and the outcome, then let the expert handle it. But if the role involves managing other people, working across teams, or following internal processes, consider full-time employment instead.
📌 Keep in mind: contractors don’t expect job security. That’s a benefit for you, unless you’re building a permanent role that requires stability and retention.
Keep it legal: avoid misclassification
Working with independent contractors has many benefits, but only if you do it right. If you treat a contractor like an employee, you may face serious problems: fines, audits, or unpaid employment taxes.
The IRS doesn’t look at job titles. It applies common law rules to check who controls the work, schedule, tools, and process. To stay compliant:
- Let the contractor control how they work.
- Don’t set their hours or include them in company meetings.
- And never list them as regular employees.
From a tax perspective, things are clear: you don’t have to withhold taxes, pay Social Security and Medicare contributions, or run payroll. The contractor handles their own tax obligations, including paying self-employment taxes and filing their own tax returns.
But if you misclassify someone, your business may become responsible for unpaid Social Security taxes, Medicare taxes, and unemployment insurance. You may also owe penalties and interest.
📌 Tip: If you’re unsure, follow the IRS guidelines or consult a professional for tax advice.
Pros and cons of hiring independent contractors
Here’s a quick overview of the pros and cons of hiring independent contractors.
| Pros | Cons |
| Lower costs (no benefits, no payroll taxes, no equipment costs) | Less control over how and when the work is done |
| Easy to scale based on project needs | May not be available for future work |
| Fast onboarding, no internal training needed | Risk of misclassification and legal consequences |
| Access to global talent without setting up a local entity | Limited loyalty or long-term commitment |
| Contractors bring focused expertise | Need clear contracts to ensure IP and copyright ownership |
| Reduced legal liability for benefits or termination | No workers’ compensation protection in most cases |
How Useme helps you hire independent contractors
Once you’ve decided to hire an independent contractor, the next step is ensuring it’s done legally and efficiently. That’s exactly what Useme does for you. With Useme:
- You don’t need to manage multiple invoices – you get one consolidated one.
- You make one payment – we handle the rest.
- Your contracts and payments are fully covered.
Here’s how Useme makes it simple
- Bring an independent contractor or find one via our Useme Jobs (job board).
- We sign a legal contract on your behalf.
- You receive one invoice.
- We handle the payout, deadlines, and tax documentation.
You stay focused on your business. We deal with the formalities.
Useme helps you:
- We sign a legal contract on your behalf, so you don’t have to worry about formalities.
- Pay freelancers without needing them to run a company.
- Work with contractors who manage their own business, even across borders.
- Access freelancers with specialized skills in design, tech, writing, consulting, and more.
Final thoughts: advantages of an independent contractor
The advantages of working with independent contractors are clear: you save time, money, and resources without sacrificing quality.
You don’t provide health benefits, manage working hours, or worry about career path planning. Contractors bring specialized skills, work independently, and deliver results. They also take full responsibility for their own taxes, tools, and deadlines. It’s not just about saving money – it’s about getting more done with less risk. You skip admin, skip payroll, and stay in control.
Independent contractors aren’t just a workaround – they’re a long-term asset
Independent contractors are more than a quick fix. For many companies, they become long-term partners. They take more responsibility for their work, value every project, and often bring insights from working with other professionals and potential clients in your business. They act like their own boss, and that mindset shows in the results.
📌 You don’t have to provide employee benefits or guide their professional development. They invest in their own benefits, skills, and growth because their reputation depends on it.
And with Useme, you also:
- Pay international independent contractors legally, in any currency.
- Get one invoice with no paperwork or delays.
- Work safely with transparent contracts, verified freelancers, and legal compliance across borders.
Unlike employees, independent contractors don’t need onboarding, benefits, or office space. You get the job done and move forward.
