Online Contractors: What They Are and How They Work

Online contractors

As the world evolves to make remote work more accessible and the gig economy grows, independent or online contracting has become a popular choice for those looking to be self-employed. But what is contracting, and how does it work?

In this article, we will take a look at what it means to be a contractor, the many career paths that contractors can take, and the benefits and challenges of this form of work. 

What is a Contractor?

A contractor is an individual or company that provides services to another company or person on a contractual basis. This involves signing a contract with a client, where the contractor acts as a temporary employee and provides services to the client for a specific period of time. 

Contract work is often more hands-on and may involve more direct supervision by a supervisor or team lead, compared to the work done by freelancers. Contractors are typically hired for their expertise in a specific area and their job responsibilities may change over time.

What’s the Difference Between Freelancers and Independent Contractors?

Freelancers vs Online contractors

Contracting is often mistaken for freelancing, but there are some major differences between the two. Most importantly, contractors are employed by an individual or company for a set period of time or for a predetermined project. 

Another major difference is that freelancers will typically work on short-term projects, often for multiple clients simultaneously. Independent contractors, on the other hand, tend to work on longer-term projects, often for a single client at a time. Freelancers will generally charge by the project or by the hour, while independent contractors may charge a flat fee for a longer-term project or even a set weekly/monthly rate. 

Additionally, online contractors may be signed to an agency that assigns jobs and deals with the legal aspects of self-employment such as taxes and contracts, while freelancers are almost always responsible for their own legalities and finding their own jobs. 

Online contractors often have a diverse range of skills and experience, which allows them to work on a variety of projects and in different industries. Overall, both freelancers and independent contractors provide services to their clients on a flexible and non-permanent basis, but the main difference lies in the legalities and the duration of the work

What Work Can Contractors Do?

As stated above, contractors often work in specialized industries, but this is not always true.  Online contracting jobs commonly include software development, graphic design, digital marketing, and virtual assistance. More about these categories and a comprehensive list of the roles within each of them can be found in our course

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According to ZipRecruiter and Indeed, some of the highest-paying online contracting jobs, with their median yearly salaries in the US, are:

  • Accountant – $62 000 per year
  • Data entry specialist – $53 000 per year
  • Copy Writer – $54 156 per year
  • Language interpreter – $55 250 per year
  • Graphic Designer –  $49 597 per year
  • Photographer –  $41 576 per year
  • Social media manager – $46 095 per year
  • Business consultant – $66 669 per year
  • Architect –  $103 899 per year
  • Web developer – $71 852 per year

Benefits of Online Contracting 

  • Remote Work: Online contractors can work from anywhere with an internet connection, providing greater flexibility and work-life balance.
  • Higher Earning Potential: Online contractors often have the potential to earn more than traditional employees, as they can negotiate higher rates and work on specialized projects.
  • Opportunity for Specialization: Online contractors have the opportunity to specialize in a specific area and work on projects that align with their skills and interests.
  • Autonomy: Online contractors have greater control over their work, including the projects they take on, the clients they work with, and the rates they charge.
  • Networking: Online contractors have the opportunity to network and build relationships with clients and other professionals in their industry.
  • Tax benefits: Independent contractors may be eligible for certain tax deductions and credits, such as home office expenses, travel expenses, and equipment purchases.
  • Variety of work: As an independent contractor, you may have the opportunity to work with a variety of clients and projects, which can provide a greater sense of job satisfaction and allow you to develop a broader range of skills.

Challenges of Online Contracting

Doing your own taxes

While there are a plethora of advantages to being an independent contractor, there are some challenges that they face that are important to be aware of. These include, but are not limited to:

  • Lack of Benefits: Online contractors typically do not receive traditional employee benefits such as healthcare, retirement savings, or paid time off.
  • Lack of Job Security: Online contractors may face uncertainty in their work and the possibility of contracts not being renewed.
  • Self-Employment Taxes: Unless they are signed to an agency, contractors are responsible for paying their own taxes and managing their finances, which can be time-consuming and stressful.
  • Client Acquisition: Online contractors must actively seek out leads to win new clients in order to maintain a steady stream of work and income.
  • Time Management: Online contractors must manage their own schedules and deadlines, which requires strong time management skills and the ability to prioritize tasks effectively.
  • Isolation: Online contractors often work alone and may miss out on the social interaction and collaboration that comes with working in a traditional office setting.
  • Legal Issues: Online contractors may face legal challenges, such as disputes with clients over contracts or intellectual property rights.
  • Unforeseen Costs: Online contractors must often cover their own expenses such as equipment, software, and subscriptions, which can add up over time.

It is important to be aware of the potential challenges involved with online contracting in order to make the best career choices for yourself, as well as to be able to be prepared for any potential issues if they do arise. 


Contracting has become a popular career path for those looking for flexibility and autonomy in their work. Online contractors work on short-term contracts or specific projects and are often hired for their specialized skills in industries such as IT, programming, and consulting. 

While there are many benefits to being an independent contractor, such as higher earning potential and greater work-life balance, there are also challenges such as lack of job security, self-employment taxes, and client acquisition. 

By understanding both the benefits and challenges of contracting, individuals can make informed decisions about their career paths and be better prepared to navigate the unique opportunities and challenges of this form of work.

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Online Contractors: What They Are and How They Work

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