What Is An Independent Contractor?
The term “independent contractors” refers to individuals or businesses who provide a service or product to another person or business without being in their direct employment. They secure consistent work on a contract basis with businesses without the commitment of becoming an employee. Consequently, contractors are not officially on the payroll of the businesses they work for and, therefore, not legible for certain employee benefits.
However, both parties can profit from this employment relationship. Where business employees can receive contributions towards their retirement plans and health care, independent contractors must budget for these commodities as they are solely responsible for funding their pensions, sick days, vacation days, and health insurance.
However, contractors do not have rigid working hours, targets, or leave restrictions imposed upon them the same way full-time employees might. Independent Contractors (Self-Employed) are often characterized synonymously as freelance workers as they are taxed similarly.
Independent contractors’ pay method differs from typical payroll employees as they are considered self-employed workers. They can be paid hourly, by milestone, or accept a flat fee by means of direct deposit, Venmo, CashApp, PayPal, or cash.
Taxes are not automatically deducted from their pay; thus, they must factor in their taxes, paid quarterly to the IRS. Applicable business expenses can be subtracted to cover costs such as equipment which can reduce their wages and, similarly, the amount they pay in taxes. Almost 13% of the first $147,000 earned by an independent contractor must go towards Social Security contributions and nearly 3% of all net income towards Medicare.
The IRS classifies anyone offering independent services to have independent contractor status meaning some doctors, dentists, and lawyers are deemed independent contractors, but so do many other professions such as tutors, domestic maintenance staff, childcare providers, writers, and even YouTubers.
Independent contractors can set their hours, rates, and availability. However, they are responsible for managing their payment, taxes, retirement plans, insurance, and other benefits. Another downside is that they will not have some of the protections that traditional employees receive through labor laws.
Independent Contractor Earnings Potential
An independent contractor role, such as maintaining an Etsy storefront, where you develop a design and work with a product partner who produces and distributes your product for a small fee, can yield consistent passive income for just a few hours of initial work. Nearly 24 million people reported using freelance work to generate additional monies aside from their salaried position.
Full-time freelancers often have multiple revenue streams, whether working with numerous business owners or offering various services. In addition, many freelancers and contractors develop their enterprises as side hustles while in full-time employment elsewhere.
At the outset, there is not a lot of money to be made from independent contractor roles, especially when considering self-employment tax and social security taxes; however, as client bases grow or systems of generating wealth multiply, the potential earnings of an independent contractor increase.
Potential earnings range from a few dollars a month in extra money to supplement a meager wage to a profitable permanent career. Forbes ranked Mr. Beast as YouTube’s highest-earning creator in 2022 after purportedly earning $54 million in 2021.
Products that create passive income, like YouTube videos which continue to generate ad sense revenue even months after being posted or downloadable digital content on Etsy, are the top ways to secure consistent income as they continue to make money in the background even when you are not actively working.
How Can I Find Independent Contractor Jobs?
As independent contracting covers a vast scope of professions, you can obtain a job in several ways. A somewhat archaic but still valid way of advertising your services is in grocery store windows or newspapers for a small fee.
Job roles such as digital photographer, life coach, or domestic help would likely benefit most from this method. Once contractors have secured some income, they can reinvest into their business by creating tangible marketing such as business cards.
Word of mouth and favorable reviews speak volumes about any product or service, especially when coupled with professional advertising. This is a great way to expand your client base if you can acquire loyal customers and ask them to distribute business cards to people they know who may also want to use your service.
Posting advertisements on social media is a great option when it comes to how to find independent contractor jobs. There are websites specifically designed for freelancers to offer their services. Websites such as Upwork or Fiver can be pivotal for aspiring writers, transcriptionists, and those offering notary services. They list their skills, rate, and wait for firms or individuals to express interest.
Apps such as LinkedIn are an excellent way for self-employed, independent contractors to present their experience and availability to potential customers. Using common job boards like Indeed, SimplyHired, and ZipRecruiter is another excellent option for finding independent contractor jobs. These sites allow you to easily upload your resume to apply for a job.
Other business may use their own websites for advertising potential positions with them, such as Uber. Although the recruitment process will be very similar to securing a W2 job, you will remain self-employed and not become an employee.
The finest way to find a job in the freelancing space is to identify what service or product you want to offer and start. Marketing your skills on various platforms and delivering a popular product that will get warm recommendations is the key to succeeding as an independent contractor.
Pros And Cons Of Being An Independent Contractor
One of the merits that makes freelancing so accessible is that it can require little to no education. Of course, a handful of freelancing positions demand formal education, and a few are skilled manual tasks and require some on-the-job training. Still, chiefly most independent contracting jobs do not require any qualifications.
The most appealing draw to becoming an independent contractor is the freedom. You are your own boss: schedule your days off, dictate your own financial targets, and set your hours. Furthermore, you can work at your own pace.
As with any job, freelancing has its drawbacks alongside its perks. Firstly, without employee status, you cannot assume employment benefits, meaning as an independent contractor, you do not get paid sick days, vacations, or pension contributions. With that being said, contractors often have to work harder and/or longer hours to compensate for any time off they do have.
Similarly, unless they are adept at setting workplace boundaries, it can be very easy for independent contractors to become overworked. As they can set their own hours, it is common for them to work into the night or over the weekend as the success of their business directly impacts their earning potential.
While a freelancer’s salary could potentially be limitless, the other side of the coin is not so appealing. Independent contractors do not have a guaranteed income as their salary depends on securing consistent or multiple contracts. This comes with the constant threat of bankruptcy and unpredictable pay. Therefore, it is advised for independent contractors to budget for more volatile months.
Another consequence of this financial fluctuation is restricting access to loans, for instance, car finance, mortgages, or personal loans, as they cannot easily prove a steady income or ability to repay the loan. This means they need to be exponentially successful to get a mortgage or other credit-dependent product.
Do Independent Contractors Need To Fill Out A W-9?
A W-9 form can be found on the IRS website and can be used to confirm a person’s correct name, address, and taxpayer identification number when managing payment details. Anyone who stands to receive financial compensation as a “non-employee” needs to corroborate their identity using a W-9 form. An example would be someone receiving profits from a real estate matter.
Their names, addresses, and taxpayer identification numbers must be correctly listed for tax records. As independent contractors are not considered employees but will receive payment, they must also complete a W-9 form. Although the IRS does not file these forms, they obtain a person’s details to allow for correct payment reporting.
Do Independent Contractors Get A 10-99 Form?
Independent contractors are likely to be given a 10-99 form. 10-99 forms are an assortment of tax forms detailing payments made by an individual or business to an individual or business for products and services rendered by a non-employee. Like any other business, freelancers and contractors are responsible for monitoring their own earnings and taxes.
Part of this obligates clients to issue a 1099-MISC form to contractors who earn in excess of $600, listing their earnings for the year. Although, as sole proprietors, independent contractors do not necessarily pay tax on their gross earnings, they are able to deduct business expenses from their income which brings down their overall income tax.
What Is The Difference Between An Independent Contractor And Self-Employed?
Independent contractors, freelancers, and self-employed people are frequently grouped together, especially for taxation purposes, yet there are some subtle differences. A self-employed person is the umbrella term for all people who are considered their own bosses or people who are not on a corporation’s payroll. They are responsible for their own pay, vacation, and taxes.
Someone self-employed but offers an unfailing service or a longstanding commission is considered an independent contractor. For example, a doctor with their own medical practice could be an independent contractor in the same way that someone who regularly writes copy for a company.
Freelancers usually have a diverse clientele and offer various products and services. They also tend to work less on a contractual basis than a contractor who works with a company regularly. As a result, freelancers usually operate in more of a gig economy fashion.
The 21+ Best Independent Contractor Jobs With No Experience
1. Digital Photographer
If you are handy with a camera and enjoy taking photographs, then digital photography is one of the best independent contractor jobs for you. Digital photography has replaced film photography as digital images are easier and cheaper to distribute, with the added bonus of being able to save them to a computer and back them up to prevent losing them.
Digital cameras use electronic photodetectors with analog-to-digital converts to produce an image through a lens instead of an image produced by exposure to film.
With Instagram and the picture-perfect image being at the forefront of everyone’s mind, digital photography is a flourishing profession.
Many photographers choose to specialize in a niche, whereas others may offer an array of services. This is definitely a freelancing venture that could yield a considerable profit. You can also take photographs of beautiful objects and sell them online through stock image sites like Adobe Stock, Shutterstock, iStock, and Dreamstime.
A digital photographer can charge anything from $25-100 or as much as $300 for a single image, but a good baseline for an average salary is around $40,000 per year.
2. Life Coach
A life coach works with their clients to help them achieve greater fulfillment within their life. This can be through relationship aids, offering career advice, and enhancing individual skills. Often, they will collaborate with their clients to pinpoint their goals and assess what obstacles prevent them from achieving them.
Life coaches are becoming extremely popular as our modern, productivity-driven culture revolves around goal-setting efficiency. People are drawn to the idea of accomplishing more in their day-to-day lives. Life coaches can market themselves to a more generalized audience by offering career coaching or life skills.
In contrast, some might concentrate on specific groups of people who benefit from coachings, such as people with ADHD and other neurodivergence or people suffering from addiction.
A life coach with little experience can make around $40,000 annually when just starting out, but with years of experience, this can climb to $100,000 or more.
3. Full-Time Blogger
Blogging is essentially a series of passages published by the same person or collection of people on the internet. They can be about the same topic or a compilation of musings about various subjects. Blogging first rose in popularity in the 2010s. Travel blogs, food blogs, fitness blogs – you name it, there’s likely to be a blog covering it. Blog posting is a great way to create a loyal fan base by providing helpful information or simply entertaining others.
It can take time to grow full-time blogging to be your sole income, but writing is a skill that lends itself to many different ventures. For example, you can pair full-time blogging with other side hustles, such as copywriting. If you put in the time and effort, blogging can be a full-time job. Many full-time bloggers earn a six-figure income; others make thousands of dollars monthly.
4. Delivery Driver
With companies such as Amazon offering next-day or even same-day delivery, these companies are required to keep delivery drivers on hand to accommodate their customer’s requests. In addition, consumers want their products, meaning delivery driving is a much sought-after service.
Delivery driving is an excellent entrance to independent contracting, as all that is required from you is a vehicle and a full driver’s license. Drivers are provided with the products that need to be delivered, be that parcels, letters, or food, and tasked to deliver the goods.
Drivers are provided with the products that need to be delivered, be that parcels, letters, or food, and tasked to deliver the goods. Delivery drivers are paid approximately $22 an hour and can pick up as much work as they choose. Their earning capabilities can be exponential. Amazon Flex, Uber, Uber Eats, Postmates, Shipt, DoorDash, and Grubhub are some of the best delivery services that hire delivery drivers.
A transcriptionist is a person who listens to audio or video files and types them word-for-for into text documents. This contractor position requires very few resources, typically only a computer. Transcription is needed for all settings, from medical transcription to court proceedings. Websites such as TranscribeMe, CrowdSurf, Way With Words, WeScribeIt, AccuTran Global, Daily Transcription, GoTranscript, and Rev frequently recruit transcriptionists.
A one-hour audio file can take between three to ten hours to transcribe, and transcriptionists usually receive payment per audio minute, hour, or project. With practice, transcription becomes easier, meaning you can get more done quickly and increase your earnings. You can earn anywhere from $5 to $50 per hour as a transcriber.
House flipping is the practice of purchasing a property with the intention of selling it for a higher price, thus making a profit. In this respect, the property is viewed much like a stock in that it is purchased not as a residence but as an investment piece. So, flippers purchase properties knowing it will be financially more viable for them to fix the issue, and once the house has been brought to a livable standard, they put the home on the market and make a profit.
Tradespeople such as painters, decorators, tilers, plumbers, etc., often become flippers as they have a comprehensive network of laborers that can assist them. If you fancy a go at flipping houses, you will need access to a down payment, but you could make as much as a 10-20% return on your investments.
7. Property Preservation Worker
If a property is vacated due to foreclosure, be that a commercial or residential, a property preservation worker will step in. They are assigned to the upkeep of the property and prevent the real estate from falling into disrepair. A large part of this is inhibiting dampness and mold in the building, especially as there are no tenants to keep the home warm. They are also responsible for necessary improvements, repairs, and shielding the structure from vandalism.
This can be an intimidating task; therefore, it is often required for property preservation workers to achieve a degree in the subject to equip them with the correct knowledge to keep the property in working order – well worth the $60,000 to $85,000 a year annual salary you could achieve in this role.
8. House Cleaner
A house cleaner or domestic cleaner goes from home to home with their cleaning supplies and cleans all or part of the home they have been paid to clean. Some people want a lot of help keeping their homes clean, whereas others just need a helping hand.
With both parents working, childcare and home maintenance are becoming more readily outsourced. Domestic cleaners are no longer only for the rich or the ailing who struggle to clean their own houses. Families all over America are seeing the benefit of employing help to keep their homes clean while they go out to work. House cleaning can afford a wage of as much as $30,000 annually.
9. Parking Lot Cleaner
With municipalities looking to cut costs, positions habitually carried out by the local government, such as parking lot cleaning, are becoming great freelance jobs. For example, as a parking lot cleaner, you can be expected to wipe down contact areas such as handrails, doors, and parking metering machines. Public areas such as lifts and stairwells also need to be swept, and moped and any litter found in the lot needs to be collected and disposed of.
Parking lot cleaners can charge upwards of $15 an hour or an annual salary of $30,000.
10. Notary Services
A notary is an individual who oversees the signing of legal documents to ensure all parties are willing to sign but also to ensure the validity of both the documents being signed and the identity of the parties signing them. They are to remain impartial even in contentious situations. Notaries can supervise marital contracts, financial transactions, real estate, and powers-of-attorney.
This is a crucial addition to any significant documentation process to ensure the authenticity and legitimacy of the signed paperwork—no wonder a notary can earn as much as $18 an hour.
11. YouTube Creator
Fast forward to 2023, YouTube has billions of hours of content for anyone to access – most of that content is created by independent contractors. Creating videos for YouTube can be an extremely lucrative career if you can generate a large enough following.
Creators make videos about various topics, from make-up to competitive eating, to docuseries on true crime, and upload them to YouTube. YouTubers can make money from the YouTube Partner Program (YPP). It allows creators to make money from ads served on their content through a Google AdSense account. The more views a channel receives, the more AdSense revenue they stand to receive.
Like several independent contractor positions we have already discussed, the way to maximize income as a YouTuber is to market other products to your audience, such as personally branded merchandise, or by using your following to get paid for ads on other platforms like Instagram.
With consistent uploads and a small following, the average salary of a YouTube content creator can range from $25,000 to around $66,000 but remember, any old videos that have been published will continue to generate AdSense revenue whenever they are watched, so the salary of a YouTuber will only grow as they produce more videos.
12. In-Home Daycare
Domestic help is on the rise, with families struggling to take care of their homes and children while parents work full-time. In-home Daycare is a more personal spin on large daycare facilities. While it is common for both mum and dad to return to work after a child is born, most families still want intimate childcare for their children when they are not there to provide it.
Hosting a daycare in your own home offers a more personal service as a household limits the number of children that can attend, meaning the caregiver has fewer children to divide their time between. Specific criteria need to be passed when working with children, but once the correct paperwork has been obtained, working with children can be very rewarding, obtaining around $650 a week.
13. Virtual Bookkeeper
Handling your payroll, cash flow, and other transactions can be difficult. Virtual bookkeepers are vital in completing invoices, chasing late payments, and preparing accounts for the end of the tax year. Contemporary software facilitates remote monitoring; therefore, hiring someone to supervise trades and ensure the books are balanced is a way to keep on top of finances without requiring them onsite.
Small organizations, non-profits, and churches often contract independent bookkeepers as an affordable alternative employing consistent in-person financial advice.
Virtual bookkeepers can earn between $200-$400 a month, so this does make a brilliant side hustle. Some companies offering remote bookkeeping jobs include 1-800Accountant, AccountingDepartment.com, Bookminders, BELAY, BooksTime, Envolta, Supporting Strategies, Backyard Bookkeeper, AIS Solutions, Robert Half, Kforce, Upwork, and Indeed.
This job is for you if you have good grammar and spelling skills. With schoolwork, office work, and even most recreational written work being done on a computer, it is easy to make mistakes when working quickly or not notice when the spellchecker makes corrections or suggestions that do not make sense. Proofreaders offer to read and check pieces of work for people and return them with any errors and spelling mistakes corrected. Proofreaders can be required on a single-case basis for a solo piece of work or a more long-term basis.
As a beginner proofreader, you can earn around $35,000, but with more experience, this can rise to $63,000. Some reputable sites to find proofreading jobs online include ProofreadingPal, ProofreadNOW.com, Scribendi, Scribbr, EditFast, ProofreadingServices.com, Wordvice, Upwork, Freelancer, PeoplePerHour, and Fiverr.
15. Teaching And Tutoring Jobs
Tutoring and teaching can take place face-to-face or remotely, making it an accessible and flexible career path for all. In addition, many school-aged children and college students pay tutors to offer additional assistance in subjects they may struggle with, especially in the lead-up to exams.
Tutors can work whenever suits them, from wherever suits them, and take on as many or as few clients as they see fit. Additional support is not exclusive to those sitting assessments. For example, those studying foreign languages often hire tutors of that language to improve their proficiency.
With English being the most spoken language in the world, English tutoring is a common way of making an income. The hourly rate you can charge for online tutoring varies from $25 to $80, depending on the subject/subjects you tutor in and the site/client you work for.
16. Amazon FBA Reseller
FBA stands for Fulfillment by Amazon. Someone who works as an FBA reseller operates an e-commerce business using Amazon as their storefront and uses Amazon products to fulfill their orders. As Amazon is a household name and often the first place many look for certain products, FBA sellers use this notoriety to get custom. They sell a product on the Amazon app or website that is then packed and posted by an Amazon fulfillment center. This takes all of the hassles out of selling.
Amazon takes a small percentage of the sales as a token for the work they do to distribute the products, but as there is an obscene amount of traffic through Amazon every day, this is a small fee to be able to run a stress-free online store. Over half of all Amazon sellers are making over $1000 a month from their stores which results in approximately $12,000 in sales over the course of a year. Some FBA sellers report sales as high as $25,000 a month!
17. Online Writer
Anyone who is adept at writing can make money as an independent contractor online. Websites such as Fiverr, Freelancer, Upwork, and PeoplePerHour allow clients to advertise for writers for a whole host of projects. This is a mutually beneficial way to fashion a writing portfolio, as you can be paid to write content for other people giving you some extra cash and pieces to showcase in the future.
Online writers can be utilized for several projects, from writing articles to blog posts and crafting introductions and explanations for web pages. Being able to research thoroughly opens many avenues for online writers, as it means they can cover almost any topic assigned to them.
Writers can be paid per word, per hour, or per milestone. You can develop a contract with a client and write on a more regular basis for them. Publications can be produced for a few dollars or a few hundred dollars based on how high the demand is for said article, meaning that salary can range extensively. Top earners in this field can earn as much as $141,000 a year.
18. Start A Baby Equipment Rental Service
What items are more short-lived than baby equipment? Children stay small for a short time, meaning the hundreds, or even thousands, of dollars spent on their cribs, pushchairs, changing tables, and the like will not be used to their full potential. So renting out baby equipment is an environmentally conscious way to help the planet and help your wallet in return.
19. Sell Books With Low Content On Amazon
Selling low-content books on Amazon has a huge profit margin and could be a worthwhile side hustle as it takes very little input. Low-content books are notepads, journals, calendars, and planners that require minimal content to be created to fill them – all that needs addressing is the cover and a couple of pages. Amazon KDP will print, assemble and post the books while handling any customer services issues for a fee but anyone who begins selling low-content books on Amazon can expect to receive 60% of the listing price.
Low-content books can be wide-ranging in subject matter or focus on a specific issue that needs targeting. Selling low-content books on Amazon can generate a small side income or can grow to bring in $30,000 a year.
20. Etsy sales
Etsy is an online marketplace that offers creative and personal products to buy on their site. On Etsy, innovative independent small businesses can sell their handcrafted or personally designed wares. As they are sold by individuals running small businesses, they tend to be tailor-made and unique items you won’t find anywhere else.
Depending on the product’s popularity, some people made a steady $20 selling their items on Esty, whereas others quit their full-time jobs and make salaries of $30,000 a year.
21. Search Engine Optimization
When you Google a subject, you rarely search through pages and pages before clicking on a website. Instead, we click one of the first links served to us at the top of the search engine. As a result, search engine optimization professionals are hot commodities in digital marketing, as their job is to ensure their content appears at the top of search engines.
The higher the website’s search hierarchy, the more traffic and, thus, the more profit the website makes. With our dependence on the internet only growing, there is longevity in becoming an SEO manager. A median salary for SEO workers is around $50,000 a year.
What Is The Difference Between 1099 Employees And W-2 Employees?
The dividing factor between 1099 and W-2 employees is how they are taxed. A W-2 employee is a member of staff who is registered on the payroll of a business. They receive their salary from which their employers withhold income taxes, Social Security, and Medicare tax, while a 1099 employee is an employee who is hired on a contractual basis. Therefore, they have no taxes withheld from their pay, as it is their responsibility to deduct them from their pay. A W-2 form and a 1099 MISC form are the different tax forms the IRS uses to categorize each type of employee.
Frequently Asked Questions
Is It Worth It To Be An Independent Contractor?
Independent contracting can be tough, particularly in the beginning when you are making a name for yourself. Many 1099 contractors struggle to generate enough income to cover all their bills and quit before they begin making a fair wage. Similarly, the lack of statutory leave puts some prospective contractors off as unpaid time away from the workplace can seem daunting. You must be driven and self-motivated to be a successful independent contractor.
On the other hand, the freedoms that come with controlling your work schedule, income, and vacations are both liberating and reinforcing. You reap all your own rewards from working hard as an independent contractor, and if you work hard enough, you can make a nice income. The roles that fit under the term independent contractor vary considerably, but, on the whole, it can be considered worth it to pursue an independent contracting position.
What Is The Job Of An Independent Contractor?
The list of independent contractor jobs covers everything from childcare provider to content creator, home maintenance, tutoring, teaching, and selling merchandise. That is, by no means, an exhaustive list. What separates and unifies the job of an independent contractor is the way they are taxed and the fact they are considered self-employed.
The job of an independent contractor is to motivate themselves to work on a contractual basis with clients to offer goods and services. Once they have fulfilled their contract, they must correct, complete, and submit tax forms such as 1099 MISC to the IRS.
Is A 1099 Job Worth It?
A 1099 job allows you to work with whom you want to when you want to on what you want to – set your own wages and schedules. Not to mention, choosing a profession that pays well or allows you to branch out into several different avenues can prove highly profitable.
How Do Independent Contractors Avoid Paying Taxes?
It is illegal not to pay taxes, and you can be fined or even incarcerated for tax evasion. Independent contractors and freelancers pay their taxes; however, they can expense some of their purchases which can subsequently lower their overall income and, thus, the amount they pay in tax.
The more money someone earns, the more they are required to pay in tax – by seemingly decreasing their income with business costs, independent contractors can reduce their gross salary. An example of this is an independent painter and decorator. Decorating people’s homes can be expensive, requiring lots of tools, paints, and equipment, so that a painter may take the cost of a new set of brushes and some fresh paint from his gross salary. Since his gross salary has decreased the price of some brushes and paint, the amount of tax he pays also decreases.
Can You Make A Lot Of Money As An Independent Contractor?
As we have seen from looking at over 20 different independent contracting jobs, the income from such a job can vary tremendously depending on which job you choose, how many hours you decide to put into it, and if you are selling a product, how popular your product is.
Many independent contractors pick several endeavors to gain revenue as this is the safest way to ensure they receive a paycheck from somewhere every month. However, some months can be slower than others, and without a guaranteed bottom-line salary, independent contracting can be very risky every month. Conversely, with hard work, determination, a popular product, and an element of luck, independent contractors can generate a nice income.
Working as an independent contractor can be a great way to earn a living for people who desire flexibility, do not mind inconsistent earnings, and can manage their time while potentially juggling multiple clients.
In addition, independent contractors must be comfortable filing their taxes quarterly with the IRS and paying for their own insurance, plus retirement savings. But, for some, the freedom to choose projects, and the flexibility of working for themselves, make the challenges worth it.