What Is a Freelance Contract?

When a person works on a per-project basis for a company or another individual, you call that person a freelancer. A freelancer is a self-employed individual who is not under the control of a business firm. Also, a freelancer is free to accept different jobs from different companies or individuals, unless a freelance contract demands exclusivity. Examples of freelancers include photographers, graphic designers, makeup artists, hair stylists, web developers, writers, event planners, and more. With that said, a freelance contract is an agreement between a client or a business entity and an independent worker who provides the services that the other party requires. Typically, a freelance agreement contains the following information: the background information of the parties involved, the contract term, the client’s expectations, the payment terms, and a termination clause. Note that freelancers are not employees, so they do not have withholding taxes when they work for a business entity. They are only responsible for paying their income taxes.

In 2018, the Freelancers Union and Upwork reported that there were about 56.7 million freelancers in the U.S.

That is a significant increase compared to 2013, where there were only about 3.7 million American freelancers.

Surprisingly, about 70% of freelancers attended skill training programs in the same year.

The Different Types of Freelancing Skills Available For You

Freelancing involves a freelancer offering his skills in return for payment. If you need help from a freelancer, then you can count on many freelancers out there. If you want to be a freelancer yourself, remember that you can learn skills and use them to earn money. The following are the different types of freelancing skills you can learn or can benefit from.

Academic writing. Any writing an individual does to complete a university or college writing is called academic writing. One uses academic writing for publications, and the usual readers of these publications are researchers and teachers. Also, one can present academic writing during conferences. Academic writers have the skills to create books, conference papers, essays, journals, reports, research papers, thesis, and translations.Accounting. Accounting involves analyzing, reporting, and summarizing financial transactions to state or federal agencies and tax collecting establishments. Also, it includes creating financial statements that are a precise summary of the transactions of a particular business over a specific timeline. The reports contain an overview of the operations, financial situation, and cash flows of the company. Typically, it is an accountant or a bookkeeper’s job to do accounting for other entities.Bookkeeping. Bookkeeping is the daily recording of a business’s financial transactions. Bookkeeping helps companies track all transactions on a book, and it is a basis for a company to make investing, financing, and operating decisions. Bookkeepers are people who handle a company’s financial data. Without them, companies will have only minimal idea of what their present financial situation is. Additionally, detailed bookkeeping is crucial to other entities, such as financial institutions and the government, because it helps them decide on lending or investment decisions. Moreover, most small businesses can’t afford to hire accountants. For that reason, they usually hire bookkeepers to do the job. Accurate bookkeeping is essential to record every penny a business spends.Data entry. The term “data entry” is broad, and it covers a wide range of occupations such as coders, clerks, data processors, transcribers, typists, and word processors. If one has a high school diploma and good typing skills, one can most likely qualify as a freelancer in this field. Data entry involves using a keyboard to encode symbolic, numeric, and alphabetic data. The data processor inputs may be an audio or hand-written file. Data processors, whom micro-labor companies hire, may perform lesser work for only small payments. Others may work for BPO companies and receive their fees on an hourly or per-word basis.Ghostwriting. Ghostwriting happens when an individual writes a book on behalf of another individual who takes the credit. Even if the ghostwriter writes an entire book, he cannot be the author. Ghostwriters focus on meeting the expectations of their clients and nothing more. These professionals have the talent to write blogs, business books, book proposals, celebrity memoirs, newsletters, speeches, and more. Clients who opt for ghostwriting can benefit in many ways. They can save time, they don’t need to study about book-writing, and they can get their book done. However, hiring a ghostwriter can be expensive. Note that any ghostwriter will ask for a high fee, and an expert will ask for a higher price. If you want a good book, then go for the latter.Graphic design. The American Institute of Graphic Arts defines graphic design as an art and a practice of organizing and expressing thoughts and experiences with textual and visual content. These visual designs can come in the form of a simple business logo, or a complex layout you can see on a website. Companies make use of graphic design to promote and advertise their products through infographics. Infographic refers to a combination of charts, images, and texts that gives people a general idea of a particular topic. Additionally, businesses hire graphic designers under a graphic design contract to establish their names through branding. In earlier times, graphic design was all about printing graphics for advertisements, magazines, and movie posters. Since we now live in the digital era, graphic design has also evolved. One example is animation or motion graphics; it brings animated objects to life. We can see this in movies, short films, TV shows, and video games.Photo editing. Photo editing is a process involving the alteration of an image, but that is only a broad definition. A photo editor can edit an image manually or through advanced software. Photo editing is also known as photoshopping, image editing, photo manipulation, or image enhancement. Moreover, editing can be either simple or complex. Simple techniques include adjusting an image’s background, colors, contrast, exposure, lens, noise reduction, size, and white balance. Complex editing may require using an advanced software program and a professional with more than enough training and experience.Transcriptionist. A person who converts an audio file into a text is a transcriptionist. There are two common types of transcriptionists: a general and a medical transcriptionist. Usually, businesses hire medical transcriptionists who are familiar with the terms used in the medical industry. General transcriptionists, on the other hand, can work for different industries. They can transcribe podcast files, journals, webcasts, videos, legal files, insurance recordings, lectures, radio shows, foreign language, and more.Virtual assistant. An individual who works as service support for other companies outside of the office is called a virtual assistant. Online business owners and entrepreneurs usually hire virtual assistants to aid their customers without being in the office. Also, a virtual assistant can work as a social media manager. The role of such is to represent a company on all social media channels. They are in charge of responding to comments, doing campaigns, and creating content. A virtual assistant can specialize in a specific skill. For example, a public relations virtual assistant focuses on managing a company’s reputation. Moreover, several VAs are also the business owners themselves, but most small businesses hire VAs under an employment contract. Other VAs choose to work for freelance sites to work on a per-project basis. Web design. A web designer’s job is to mainly work on the appearance and layout of a particular website. Appearance refers to the colors, images, and fonts a designer uses. Layout concerns how a designer categorizes and structures information on the website. Note that a great web design offers convenience to its users.

How To Set Up a Freelancing Business

Before you work as a freelancer, you must be clear about what kind of freelancing business you want to set up. It would be best if you learn how to manage your time because time is a factor that determines your business’s success. With that said, what are the specific steps one must take to work as a full-time employee while setting up a freelancing business? Follow the steps below.

Step 1: Establish Your Goals

You must establish your goals and be clear about what you want to achieve. Address the questions: Are you doing freelancing mainly to earn extra income? Do you want to work as a full-time freelancer in time? Is freelancing a means for you to achieve a greater goal? Take your time to know your reasons for becoming a freelancer or for starting your freelance business. After identifying your big goals, you can begin creating short-term goals that will be your step by step guide to achieving your primary goal.

Step 2: Place Your Business in a Profitable Position

Let’s say you’re an illustrator, and you hone your skills by using photoshop or adobe illustrator during your leisure time. You have many competitors in the same industry who will charge at lower prices than you. Many people worldwide want to earn and are willing to offer their services at a low price. For that reason, big companies take advantage of them. So, don’t try to compete with those prices. Focus on placing your business in a profitable position. Seek for clients who value quality work. Compete on value rather than price, and you’ll see better results.

Step 3: Know Your Target Market

Now that you have put your business in a profitable position, the next step is to attract the right customers. Your mission is to establish your name and be a go-to place for specific types of customers. Therefore, ask yourself the following questions: Which entities will need my service? Which business institutions can pay me the right price so I can achieve my goal? Who are the people who make decisions for these entities? When you answer those questions, you will better understand your target market.

Step 4: Set the Right Price for the Services You Offer

Price your services based on their value and not on the prices of your competitors. Don’t allow others to define the value of your service. Note that your fees may be expensive or cheap, depending on who your clients are. That is why you must first determine and attract the right clients. By doing that, you will be able to deliver what your clients need, and that will justify the price they have to pay. Remember not to charge too much, but at the same time, don’t undervalue your service.


What is the difference between an employment contract and a freelance contract?

An employment contract is an agreement between an employee and an employer. A full-time employee cannot work for other business organizations that compete with the current company he is working for. A freelancer, on the other hand, under a freelance contract, can work for as many companies as he wants since he is working only on a per-project basis.

What is an independent contractor?

According to Investopedia, an independent contractor is another term for a freelancer. An independent contractor is a self-employed individual who offers his services to others. They pay their taxes on their own since they are not employees. Dentists, doctors, lawyers, veterinarians, engineers, and other professionals can work as independent contractors.

Can you terminate a freelance worker anytime?

The answer depends on what the contract states regarding termination. Typically, contracts stipulate a notice, which is a specific number of days, before one party can legally cancel an agreement.

A freelance contract is a document that ensures both service and payment. Without one, a client may end up not completing a project. On the freelancer’s side, he may also end up not receiving compensation for his labors. You can check and download our contracts for freelance work above for reference and use.