{"id":186184,"date":"2023-12-05T07:39:53","date_gmt":"2023-12-05T07:39:53","guid":{"rendered":"https:\/\/www.aihr.com\/?post_type=hr-glossary&p=186184"},"modified":"2024-04-03T17:19:14","modified_gmt":"2024-04-03T17:19:14","slug":"contract-employee","status":"publish","type":"hr-glossary","link":"https:\/\/www.aihr.com\/hr-glossary\/contract-employee\/","title":{"rendered":"Contract Employee"},"content":{"rendered":"\n

What is a contract employee?<\/h2>\n\n\n\n

A contract employee is someone who is hired for a fixed period of time to work on a specific project or set of tasks. A formal contract typically outlines the scope of work, project duration, pay, and other employment terms.<\/p>\n\n\n\n

Unlike regular employees, contract employees are typically not considered permanent members of staff and often do not receive the same benefits (like health insurance, paid time off<\/a>, or retirement plans). Generally, this employee is chosen because they have a specific set of skills or expertise that meets a company\u2019s needs. For example, a company may hire a social media specialist for a three-month marketing campaign.<\/p>\n\n\n\n

Contract employee vs. full-time employee<\/h2>\n\n\n\n
<\/td>Contract employee<\/strong><\/td>Full-time employee<\/strong><\/td><\/tr>
Relationship<\/strong><\/td>Temporary
Short-term<\/td>		Ongoing
Long-term<\/td><\/tr>
Pay<\/strong><\/td>Established fee\/rate based on project\/task<\/td>Set salary<\/td><\/tr>
Work schedule<\/strong><\/td>Can set own hours, working as needed to complete job duties<\/td>Has a set schedule and duties<\/td><\/tr>
Benefits <\/strong><\/td>Not eligible for benefits<\/td>Eligible for benefits<\/a> such as health insurance, paid time off, and retirement plans<\/td><\/tr>
Taxes<\/strong><\/td>No withholding tax on contractor payments<\/td>Mandatory payroll taxes withheld from employee wages<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Contract employee vs. independent contractor<\/h3>\n\n\n\n

Although sometimes used interchangeably, there are some key differences between a contract employee and an independent contractor<\/a>.<\/p>\n\n\n\n

Contract employees typically work for a company under a formal employment contract. Although they are not permanent employees, they are still considered as employed by the company. However, an independent contractor is self-employed, providing services as a separate business entity. They are not employed by the company and have more control over how, when, and where they work.<\/p>\n\n\n\n

\"Key<\/a><\/figure>\n\n\n\n

Contract employee examples<\/h2>\n\n\n\n

Some of the most common positions for this kind of employee include:<\/p>\n\n\n\n