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Freelancing vs. Independent Contractor vs. Temp: What's The Difference?

Jun 2, 2021
(updated: Jun 21, 2023)
Max 5 min read

The gig economy is a labor market in which workers fill temporary and part-time roles, rather than full-time permanent positions. Workers in the gig economy are not employees, but rather self-employed workers who frequently work for an array of clients. Although the gig economy as a whole offers numerous perks, including independence and flexibility, it's important to understand the different roles and how they may benefit and affect your work.

When seeking work, you may come across postings for freelancers, independent contractors, and temp workers. While these roles are similar, they have different standards and advantages. Before taking a job, it is critical to understand what these roles signify and how each designation can affect your hours, income, and schedule. Here at Indy, we aim to make freelancing simple. In this article, we will look at the differences between freelancers, independent contractors, and temporary workers and which may be most suitable for you.


A freelancer is a self-employed, non-permanent worker who provides goods and services to a variety of companies and clientele. As a freelancer, you can determine your own prices, manage your own tax, and work anywhere you wish.

What work you do as a freelancer depends on your industry. However, there are several responsibilities, no matter the industry, to complete projects, ensure client satisfaction, and have success running your own business. These include:

  1. Creating assignments in accordance with the specifications provided.
  2. Editing assignments to guarantee their accuracy and presentation.
  3. Copying and filing all completed assignments.
  4. Maintaining an accurate record of hours worked and earnings.
  5. Registering as a taxpayer and timely filing your own tax returns.
  6. Assuring that your work equipment is in good functioning order at all times.

Advantages of freelancing

Here are just a few advantages of freelancing.

The ability to choose how, when, and where to work

One of the main advantages of being your own boss is that you don't have to get permission to work from home, start late, or work while traveling. You set your own business hours and where you work.

Selecting your own clients

Once your business is up and running, you'll be able to pick and choose your freelance jobs and which clients you wish to deal with. When you feel like you don't fit in with the client's personality, don't like someone's attitude, or don't agree with the payment terms, you can redirect your efforts to finding a new job rather than fighting ongoing conflicts with the customer.

Retaining the profits

One of the best aspects of working as a freelancer is that you can see a clear correlation between your efforts and your account balance. Because you keep all of the after-tax profits, you have complete control over how the money is allocated and spent.

Disadvantages of freelancing

What happens when things don't go as planned for freelancers? It's critical to be aware of some of the less desirable conditions you can encounter if you decide to become a freelancer, so you can prepare yourself and take the necessary precautions to avoid anything negatively impacting your freelance experience.

Little support

When dealing with clients, receiving a complaint, or facing non-payment, there is no legal or HR help to turn to—and dealing with these difficulties on your own can be exhausting at times. Signing a freelance contract before working with a new client or project is the best method to mitigate the impact of these concerns.

It can be lonely

Working at home all the time with minimal interaction with the outside world might soon become lonely. People have the most difficulty when faced with business issues and must hold all of the responsibilities alone. Networking groups are a great option for freelancers to meet like-minded people with varied levels of skill, allowing them to learn, share, and form new business partnerships.

Payment irregularities

Locking in regular payments can be difficult unless you can obtain recurring monthly revenue. Your monthly income will be totally determined by the amount of work you manage to do as well as the goodwill of your clients!

Independent Contracting

An independent contractor is a temporary employee that works for multiple clients at the same time.

Independent contract workers must maintain track of their profits and include all client payments. Clients must issue 1099-MISC forms to their contractors by law if the amount paid warrants the expense. If an independent contractor earns more than $600 from a single payer, the payer must provide the contractor with a 1099 form outlining their earnings for the year.

While the role of an independent contractor differs according to industry, there are several necessary responsibilities.

  1. As needed, communicating with the customer to clarify job requirements.
  2. Getting the supplies needed to finish the assignment.
  3. Supervising the assignment from start to finish.
  4. As needed, tailoring your approach to work to the job specifications.
  5. Assisting the client with assignment-related concerns as they arise.
  6. Assuring that assignments are done in accordance with the specifications.
  7. Completing tasks by predetermined timeframes.
  8. Finishing and filing your tax returns on time.

Advantages of independent contracting

The benefits of working as an independent contractor mainly revolve around the increased freedom they have—choosing their own hours, choosing which jobs to accept, and, in some cases, choosing where they work.

They may also be eligible for the home office tax deduction, which allows them to deduct the business portion of their costs for things like insurance, rent, maintenance, security systems, utilities, and services.

They also have entire control over the development of their business, from recruiting and firing to client selection. They can earn as much as they want, unlike employees who have a defined annual pay. Finally, they can feel satisfaction and accomplishment in creating a successful business that belongs solely to them.

Disadvantages of independent contracting

One disadvantage of independent contracting is the lack of job security and unstable income. When business is bad, they don't get a regular salary, and their income is inconsistent and highly unpredictable.

Because independent contractors are not eligible for employer-provided healthcare insurance, they must pay for their own cost of healthcare.

Temporary Work

Temporary workers can be extremely resourceful for businesses. Employers frequently use a third party to find temporary workers, such as a staffing firm or a recruiter, but they can also source them directly.

Temporary workers are often considered employees, which means additional perks (such as not having to budget taxes on your own) and advantages that freelancers and independent contractors don't have.

Some businesses hire temporary workers on short-term contracts; however, this is usually reserved for highly trained workers.

Whether the temporary worker is regarded as an employee of the company depends on state, federal, and local laws. However, if the temporary worker was hired directly by the employer, they would be considered an employee of the company rather than an independent contractor.

Advantages of temporary working

Let's take a look at some of the advantages of being a temporary worker.

You can improve your skills

Looking to start a career, change fields, or expand your present knowledge? You can benefit from a temporary job. Whether you work in a warehouse, production, clerical, or other field, the skills you gain through temping can be added to your CV. Short-term work may also provide you with extremely valuable on-the-job training.

All of these can boost your value to prospective employers. Hiring managers are always on the lookout for employees with a diverse set of talents. And, if you are entering the workforce for the first time, temping can be an excellent method to obtain valuable experience while preparing for a long-term job.

Helps you fill in employment gaps

Some people are hesitant to take on temporary jobs, even when they are unemployed, since they believe it will not look "good" on their CV.

However, temporary assignments are excellent for filling gaps between long-term roles. Not only will you be able to earn money while looking for the proper fit, but it will also make you more appealing to hiring managers. Employers may be hesitant to hire someone with long spells of unemployment on their résumé.

A consistent work history helps reassure hiring supervisors that you are trustworthy. It may also boost your chances of being contacted when applying for long-term work.

Can lead to permanent employment

While a job may begin as a temporary employment, it is possible that it will evolve into a permanent position.

Short-term jobs allow you to get your foot in the door with a particular firm or team. If you demonstrate that you are a dependable employee, hiring managers at that organization will be more inclined to consider you when an internal position becomes available.

Disadvantages of temporary working

While there are several perks to temporary work, there are several disadvantages to consider. These include:

The positions are temporary

The majority of temporary assignments exist to provide businesses with immediate, short-term needs.

For example, you could be assisting a company during their busy season, assisting with a unique project, or even covering for someone on leave.

These roles are not often intended to be ongoing and typically last a few days to a few weeks. While they may last longer, a temp job is not a guaranteed bet if you are searching for a career at home. If you want to temp long-term, you must be willing to explore new opportunities on a regular basis. Something to think about if you're seeking something stable and secure.

You might not always feel like you're a part of the team

Even though temporary workers provide valuable work and play an important role in assisting firms in meeting their business objectives, they may feel lonely or separated from other employees at times.

Coworkers may be less likely to form bonds with you if they believe you won't be around for long. Similarly, you may be excluded from team meetings or other events, which may reduce your morale.

If the prospect of this bothers you, a temp job might not be the best option for you. However, if you are comfortable working independently and do not require a lot of external validation, it could be an ideal choice.

Temporary positions may pay less

Because the bulk of temporary employment jobs are entry-level and transitory, they do not always pay as much as higher-skilled jobs.

That is not to imply that the pay for a temporary assignment is not similar to the same long-term role, but you will not receive benefits and perks from the business, resulting in a lower overall compensation.

For some, this may be a deal breaker. However, if you want to avoid the stress and pressure of unemployment while still paying your bills, temp jobs can be a terrific choice.

Key Differences

To summarize the above points, let's take a quick look at the key difference between freelancing vs independent contracting vs temporary work.

Relationship with clients/employers

One advantage of freelancing and independent contracting is the ability to choose your own clients. In both roles, you are responsible for building your own clientele, client communication, and effectively running projects alongside their needs.

This is slightly different for temporary workers. Who is considered your employer depends on federal, state, and local laws. If the relationship fails to meet all applicable independent contractor standards, the individual must be classified as an employee. This could be of either the hiring company or the job agency.

Job duration

One disadvantage of temporary working is the duration of jobs. These roles are not often intended to be ongoing and typically last a few days to a few weeks.

Whereas with independent contracting and freelancing, you have slightly more freedom when it comes to choosing work. Although you are not guaranteed steady and additional income, and job duration differs in accordance to project scopes and client expectations, you have the ability to choose which ones to take on and more freedom when it comes to client/job negotiation.

Control and independence

Freelancers and independent contractors have entire control over the development of their business, from recruiting and firing to client selection. You can earn as much as they want, unlike employees who have a defined annual pay.

Temporary workers also have the ability to adjust work to their schedule. You can work as many or as few hours as they desire, depending on requirements. However, especially with filling-in temporary jobs, this isn't always the case. As noted above, you may be classed as an employee for the company in which you work, which does eliminate the freedom of choosing your hours and rate of pay.

This does mean, however, that you will not be responsible for budgeting and paying taxes on your own—your employer takes tax out before your pay gets to you—and may have additional benefits such as sick pay.

How Indy Can Help

Here at Indy, we aim to make freelancing simple. That's why we offer a range of tools to help with the day-to-day running of your business. Time is money for independent professionals. You can easily schedule appointments and meetings, track time, and check what's due using our Calendar app. It even works with Google Calendar. Furthermore, our Time Tracker ensures you never miss another minute for which you should be compensated. With a few clicks, you can even tie time tracking to a billable invoice.

With Indy, you can manage all of your business tasks, keep track of your time, and safely store important files all in one place! Sign up today and try for yourself.


Although the gig economy as a whole offers numerous perks, including independence and flexibility, it's important to understand the different roles and how they may benefit and affect your work. While these roles are similar, they have different standards and advantages. From job duration, to control and independence, considering how each role can affect your hours, income, and schedule is crucial before accepting any jobs in the gig economy.

To help find work, check out our guide on 10 Unconventional Ways to Find Freelance Gigs That Work.


How much money does a freelancer make?

ZipRecruiter lists the average national salary for freelancers at $32 per hour with an annual salary of around $42,000. The number and type of jobs a freelancer accepts affect how much money they make. Some freelancers earn more, while others bring in less revenue.

How many clients can a freelancer have?

A freelancer can have as many clients as they can handle while keeping up the quality of their work. Usually, any or all freelancers involved in any function of Digital Marketing maintain a few long-term clients and work on short-term projects concurrently.

The type of work and amount of time a freelancer is willing to devote to work determines the number of clients.

How much money does an independent contractor make?

According to ZipRecruiter, an individual contractor can easily make over $3,000 per month or more than $40,000 annually. The pay rate varies by state and usually depends on the average cost of living.

How many clients can an independent contractor have?

Independent contractors usually have one client at a time. The tasks are often more time-consuming and require attention to detail.

It is possible to have multiple clients simultaneously, but it usually only applies to contractors working on part-time projects.

How much money does a temp make?

How much money a temp makes depends on the job. On average, ZipRecruiter reports an hourly rate of $18 and an annual salary of around $37,406. Some temps can earn over $60,000 per year. It depends on the type of work.

How many clients can a temp have?

A temp only has one client at a time unless it is a part-time job. Some can handle two clients, but it is rarely a good idea.

A temp is an employee at a company expected to perform efficiently and professionally. It includes being prompt and ready to perform their duties.

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