{"id":13499,"date":"2020-09-10T07:00:00","date_gmt":"2020-09-10T11:00:00","guid":{"rendered":"https:\/\/www.zolo.ca\/news\/?p=13499"},"modified":"2026-01-05T10:03:19","modified_gmt":"2026-01-05T15:03:19","slug":"difference-freelance-contractor","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/difference-freelance-contractor","title":{"rendered":"Freelance, Contractor, Work-From-Home vs Digital Nomad: What\u2019s the Difference?"},"content":{"rendered":"\n<p>Over two decades ago, many jobs that required a computer and a connection to the Internet required dedicated office space. A variety of professionals, including data entry specialists, writers, editors, accountants, HR personnel and even graphic artists would congregate in a work environment to perform their tasks.<\/p>\n\n\n\n<p>Then computers got smaller; computer memory got larger; Internet connections got faster and far more plentiful and, almost overnight, it was quite possible for many professionals to work from just about anywhere.<\/p>\n\n\n\n<p>While some firms embraced remote-working options early on&nbsp; \u2014 we did at Zolo! \u2014 many stuck to the predefined concept of a centralized office location. Then COVID-19 hit and, quite suddenly, shared space became a potential health hazard.<\/p>\n\n\n\n<p>Almost overnight, the number of people working from home ballooned and many firms began to consider how best to facilitate workplace collaboration with health-ministry imposed social distancing rules.<\/p>\n\n\n\n<p>The people that paved the way for many of the work-from-home strategies were the brave freelancers, contractors and self-employed; people who eschewed the comfort and familiarity of an office or cubicle in order to be in complete control of their workspace.<\/p>\n\n\n\n<p>Now, more people face uncertain employment even as the world grapples to find ways to do business while maintaining social distance. As a result, there\u2019s been renewed interest in self-regulated work schedules and space. To help you navigate, here\u2019s a primer on the what the difference is between freelance, self-employment and contract work (and everything else in-between). Read on to learn almost everything you need to know about:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The definitions of freelancer, contractor, self-employed, solopreneur and digital nomad;<\/li><li>The definition of work-from-home;<\/li><li>&nbsp;Why the correct classification matters;<\/li><li>The key differences between these work-from-home designations summarized in a table;<\/li><li>How to determine your status<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-freelancing?-definition-of-a-freelancer\">What Is Freelancing? Definition of a Freelancer<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"772\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/what-is-freelancing-1024x772.jpg\" alt=\"Multi ethnic Young Woman Relieved and Smiling Over Financial Cal\" class=\"wp-image-15449\"\/><\/figure>\n\n\n\n<p>Freelancing is defined as a contract-based work where the freelancer uses her skills to provide goods or services to several clients. That means a freelancer can work with several clients, at the same time, as long as the freelancer has the capacity to deliver what is required (on-time and on-budget, as they say).<\/p>\n\n\n\n<p>Typically, a freelancer is somebody who will work on many short-term contracts at the same time. Even if the freelancer works on retainer with some clients \u2014 a retainer is an amount of money paid upfront to secure the services of the freelancer \u2014 the freelancer can still seek out and take on additional work, as their time and capacity permits.<\/p>\n\n\n\n<p>In North America, the term freelancer has typically been applied to people who do creative contract work. In this way, a freelancer will work on projects (<a href=\"https:\/\/www.portfoliocreative.com\/blog\/2017\/1\/18\/job-vs-gig-whats-the-difference-and-why-it-matters\" rel=\"nofollow\">also called gigs<\/a>), typically work alone and either work-from-home or their own chosen workspace.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-a-contractor?-definition-of-a-contractor\">What Is a Contractor? Definition of a Contractor<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/what-is-a-contractor-1024x683.jpg\" alt=\"Cheerful Lady In Blue Shirt Is Sitting A The Table And Drinking\" class=\"wp-image-15450\"\/><\/figure>\n\n\n\n<p>If you\u2019re wondering what the difference is between a freelancer and a contractor, you are not alone. Type this search into Google and more than 51.5-million search results will pop up.<\/p>\n\n\n\n<p>Just like a freelancer, a contractor is not an employee of a company. Neither a freelancer nor a contractor will receive the benefits associated with employment, such as healthcare benefits, a retirement savings packages, a compensation package (if let go or retiring), or taxes are taken off their pay at the source (meaning, there is no employer to hold back taxes).<\/p>\n\n\n\n<p>However, there is one major difference: Contractors typically work for one client at a time and typically for longer periods of time. For instance, an insurance firm may hire a data entry specialist on a 12-month contract. This contractor would not work for any other client and may even be required to come into the client\u2019s office.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-is-a-freelancer-different-from-self-employment-(or-a-solopreneur-or-business-owner)?\">How Is a Freelancer Different From Self-Employment (Or a Solopreneur or Business Owner)?<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/contractor-vs-freelancer-1-1024x683.jpg\" alt=\"A Young Beautiful Student Girl Does Homework Or Writes A To do L\" class=\"wp-image-15455\"\/><\/figure>\n\n\n\n<p>Both freelancers and contractors are also self-employed. However, how each obtains a client determines which classification is appropriate to use.<\/p>\n\n\n\n<p>The freelancer focuses on getting new clients; the self-employed worker focuses on producing their good or service.<\/p>\n\n\n\n<p>That\u2019s because a freelancer takes on a variety of jobs from a variety of clients; the focus of a freelancer is to get additional work, either through the same clients or by attracting new clients.<\/p>\n\n\n\n<p>While a self-employed person will focus primarily on a certain line of work, such as producing cupcakes or developing code, which attracts new and returning customers.<\/p>\n\n\n\n<p>While the classifications tend to overlap and blend, the term self-employment tends to imply a sense of individualism, while the term freelancer implies working for multiple clients.<\/p>\n\n\n\n<p>(To be clear, a business owner is also self-employed, but owns a business that is usually defined by its own space and\/or identity. The term solopreneur only came into use in the 1990s and identifies a business owner that set up the business by themself.)<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-a-digital-nomad?-definition-of-a-digital-nomad\">What Is a Digital Nomad? Definition of a Digital Nomad<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"706\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/digital-nomad-1024x706.jpg\" alt=\"A male and female leaning against a fence looking at a phone\" class=\"wp-image-15451\"\/><\/figure>\n\n\n\n<p>Digital nomads live a travel-heavy lifestyle, moving from one location to another while staying connected to the world digitally. Their<a href=\"https:\/\/www.webworktravel.com\/article\/best-location-independent-jobs\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"> jobs are location-independent<\/a> allowing them to work remotely from anywhere. away from the company\u2019s physical office. Digital nomads rely heavily on WiFi and the ability to connect to the Internet. As a result, digital nomads focus on developing work habits that enable them to get online when and where required.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-does-work-from-home-(wfh)-and-telecommuting-mean?\">What Does Work-From-Home (WFH) And Telecommuting Mean?<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/what-is-telecommuting-1024x683.jpg\" alt=\"Multi Tasking Father Holds Baby Son And Cleans Surface As Mother\" class=\"wp-image-15454\"\/><\/figure>\n\n\n\n<p>To muddy the waters, the term work-from-home is typically only applied to employees who use their home space to complete their work duties rather than the company office. Other terms for work-from-home (WFH) include: telecommuting, telework, teleworking, mobile work, e-working, mobile work, virtual jobs and remote work.<\/p>\n\n\n\n<p>For most telecommuters, technology is key. Using a WiFi connection, telecommuters can use online platforms, such as <a href=\"https:\/\/zoom.us\/about\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Zoom <\/a>or <a href=\"https:\/\/slack.com\/intl\/en-ke\/help\/articles\/115004071768-What-is-Slack-\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Slack<\/a> to connect with an employer or colleagues.<\/p>\n\n\n\n<p>Some of the most popular telecommuting jobs include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Content writers<\/li><li>Web developers<\/li><li>Social media managers<\/li><li>Graphic designers<\/li><li>Accountants<\/li><li>SEO specialists<\/li><\/ul>\n\n\n\n<p>While telecommuting options are now offered across multiple sectors, there are still a number of jobs that cannot operate remotely, such as security guards, logging-truck drivers, and those who work in the trades.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The Pros of Telecommuting<\/strong><\/h3>\n\n\n\n<p>Some of the benefits of being an employee and a telecommuter are:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>More flexibility with your daily schedule;<\/li><li>Reduced commuting costs;<\/li><li>Increased employee retentions since employees report being <a href=\"https:\/\/www.forbes.com\/sites\/mikekappel\/2016\/07\/27\/for-employee-retention-theres-no-place-like-home\/#6f8eed0967c8\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">happier than their counterparts;<\/a><\/li><li>Boost in productivity.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The Cons of Telecommuting<\/strong><\/h3>\n\n\n\n<p>There are a few drawbacks that could affect both the employer and the teleworker:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Loneliness due to isolation;<\/li><li>Technical issues may cause communication breakdown;<\/li><li>Harder to monitor day-to-day activity and productivity.<\/li><\/ul>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/best-remote-work-jobs\">Best Work-From-Home and Remote Jobs<\/a><\/p><\/section>\n\n\n\n<h3 class=\"wp-block-heading\">What Is a Flexible Workplace?<\/h3>\n\n\n\n<p>A flexible workplace is when an employer is flexible about how work can be completed. For instance, an employee may negotiate to commute to the office (or warehouse or store, etc.) only two days a week and the remaining three days a week the employee will work-from-home.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why-do-all-these-different-designations-matter?\">Why Do All These Different Designations Matter?<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"680\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/09\/what-is-your-title-1024x680.jpg\" alt=\"Casual businessmen and cheerful business woman in office working\" class=\"wp-image-15456\"\/><\/figure>\n\n\n\n<p>Who cares what I call myself, right? The tax collector cares.<\/p>\n\n\n\n<p>Thankfully, the only real concern is whether or not you are classified as an independent contractor or freelancer when, in fact, you are an employee.<\/p>\n\n\n\n<p>To understand why, consider how each worker classification ranks based on 10 criteria, as seen in the table below (scroll left to see how all 10 criteria impact each designation): <\/p>\n\n\n\n<div id=\"footable_parent_14008\"\n         class=\" footable_parent ninja_table_wrapper loading_ninja_table wp_table_data_press_parent semantic_ui \">\n                <table data-ninja_table_instance=\"ninja_table_instance_0\" data-footable_id=\"14008\" data-filter-delay=\"1000\" aria-label=\"Difference between freelancer, contractor, self-employed, remote worker, digital nomad and employee\"            id=\"footable_14008\"\n           data-unique_identifier=\"ninja_table_unique_id_3170859204_14008\"\n           class=\" foo-table ninja_footable foo_table_14008 ninja_table_unique_id_3170859204_14008 ui table  nt_type_legacy_table hide_horizonal_borders striped  footable-paging-right ninja_table_search_disabled ninja_table_pro\">\n                <colgroup>\n                            <col class=\"ninja_column_0 \">\n                            <col class=\"ninja_column_1 \">\n                            <col class=\"ninja_column_2 \">\n                            <col class=\"ninja_column_3 \">\n                            <col class=\"ninja_column_4 \">\n                            <col class=\"ninja_column_5 \">\n                            <col class=\"ninja_column_6 \">\n                            <col class=\"ninja_column_7 \">\n                    <\/colgroup>\n        <thead>\n<tr class=\"footable-header\">\n                                                                                                                                        <th scope=\"col\"  class=\"ninja_column_0 ninja_clmn_nm_characteristic \">Characteristic<\/th><th scope=\"col\"  class=\"ninja_column_1 ninja_clmn_nm_freelancer \">Freelancer<\/th><th scope=\"col\"  class=\"ninja_column_2 ninja_clmn_nm_contractor \">Contractor<\/th><th scope=\"col\"  class=\"ninja_column_3 ninja_clmn_nm_selfemployed \">Self-employed<\/th><th scope=\"col\"  class=\"ninja_column_4 ninja_clmn_nm_businessowner \">Business Owner<\/th><th scope=\"col\"  class=\"ninja_column_5 ninja_clmn_nm_remoteworker \">Remote worker<\/th><th scope=\"col\"  class=\"ninja_column_6 ninja_clmn_nm_digitalnomad \">Digital Nomad<\/th><th scope=\"col\"  class=\"ninja_column_7 ninja_clmn_nm_employee \">Employee<\/th><\/tr>\n<\/thead>\n<tbody>\n\n        <tr data-row_id=\"16482\" class=\"ninja_table_row_0 nt_row_id_16482\">\n            <td>Employment Status<\/td><td>Self-employed<\/td><td>Self-employed<\/td><td>Self-employed<\/td><td>Self-employed<\/td><td>Employee<\/td><td>Self-employed <\/td><td>Works for one company<\/td>        <\/tr>\n            <tr data-row_id=\"16483\" class=\"ninja_table_row_1 nt_row_id_16483\">\n            <td>Control<\/td><td>Full control of work and schedule<\/td><td>Can have full control over work and schedule, or may have a client that exercises some control<\/td><td>Full control of work and schedule<\/td><td>Can have full control over work and schedule, or clients (or market) may demand specific operating times  <\/td><td>Employer exercises some control over the work and schedule<\/td><td>Full control of work and schedule<\/td><td>Employer exercises some control over the work and schedule<\/td>        <\/tr>\n            <tr data-row_id=\"16484\" class=\"ninja_table_row_2 nt_row_id_16484\">\n            <td>Number of clients<\/td><td>Several at once<\/td><td>Works for several, but usually not all at once<\/td><td>Can work for one client or many<\/td><td>Typically works with many clients<\/td><td>Works for one client (company that employs the remote worker)<\/td><td>Can work for one client or many<\/td><td>Works for one client (company that employs the remote worker)<\/td>        <\/tr>\n            <tr data-row_id=\"16485\" class=\"ninja_table_row_3 nt_row_id_16485\">\n            <td>Work hours<\/td><td>Flexible work hours<\/td><td>Can have set work hours as per client contract of flexible work hours <\/td><td>Flexible work hours<\/td><td>Work hours dictated by client demands for business goods and services<\/td><td>Generally set work hours, as per employment contract<\/td><td>Flexible work hours<\/td><td>Generally set work hours, as per employment contract<\/td>        <\/tr>\n            <tr data-row_id=\"16486\" class=\"ninja_table_row_4 nt_row_id_16486\">\n            <td>Place of work<\/td><td>Remote<\/td><td>Client's office or remote<\/td><td>Remote or at business space<\/td><td>Business space<\/td><td>Remote<\/td><td>Remote<\/td><td>At the company office or place of work<\/td>        <\/tr>\n            <tr data-row_id=\"16487\" class=\"ninja_table_row_5 nt_row_id_16487\">\n            <td>Project Duration<\/td><td>Shorter projects <\/td><td>Longer projects<\/td><td>Short or long projects<\/td><td>Works at specific good or service, only<\/td><td>Short or long projects<\/td><td>Short or long projects<\/td><td>Short or long projects<\/td>        <\/tr>\n            <tr data-row_id=\"16488\" class=\"ninja_table_row_6 nt_row_id_16488\">\n            <td>Tax responsibility<\/td><td>Responsible for paying own taxes<\/td><td>Responsible for paying own taxes<\/td><td>Responsible for paying own taxes<\/td><td>Responsible for paying own taxes<\/td><td>Company withholds and remits taxes<\/td><td>Responsible for paying own taxes<\/td><td>Company withholds and remits taxes<\/td>        <\/tr>\n            <tr data-row_id=\"16489\" class=\"ninja_table_row_7 nt_row_id_16489\">\n            <td>Benefit responsiblity<\/td><td>Responsible for own benefits<\/td><td>Responsible for own benefits<\/td><td>Responsible for own benefits<\/td><td>Responsible for own benefits<\/td><td>Company can provide benefits (premiums are typically deducted from paycheque)<\/td><td>Responsible for own benefits<\/td><td>Company can provide benefits (premiums are typically deducted from paycheque)<\/td>        <\/tr>\n            <tr data-row_id=\"16490\" class=\"ninja_table_row_8 nt_row_id_16490\">\n            <td>EI eligibility <\/td><td>Not eligible<\/td><td>Not eligible<\/td><td>Can access EI Special Benefits (such as parental benefits, sickness benefits, compassionate care benefits, etc.) as long as you are registered for EI 12 months prior to the claim<\/td><td>Not eligible (unless registered and paying into EI for at least 12 months before claim is made)<\/td><td>Eligible<\/td><td>Not eligible<\/td><td>Eligible<\/td>        <\/tr>\n            <tr data-row_id=\"16491\" class=\"ninja_table_row_9 nt_row_id_16491\">\n            <td>Rate decision<\/td><td>Sets own rates<\/td><td>Sets own rates<\/td><td>Sets own rates<\/td><td>Market dictates price of goods or services; business owner determines own salary or rate<\/td><td>Negotiated (salary or hourly wage) as per employment contract<\/td><td>Sets own rates<\/td><td>Negotiated (salary or hourly wage) as per employment contract<\/td>        <\/tr>\n    <\/tbody><!--ninja_tobody_rendering_done-->\n    <\/table>\n    \n    \n    \n<\/div>\n\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/work-from-home-tax-deductions\">What You Need to Know About the T2200 and Work-From-Home Tax Deductions<\/a><\/p><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-to-determine-your-status\">How to Determine Your Status<\/h2>\n\n\n\n<p>The good news is that the Canada Revenue Agency (CRA) does not treat contractors, the self-employed, solopreneurs or freelancers any different, from a tax perspective. You will have to report all income and claim any deductions related to earning the income using Form T2125: Statement of Business or Professional Activities.<\/p>\n\n\n\n<p>However, if you are an employee (or a digital nomad that spends more than 181 days out of the country) you will need to report income and taxes for your appropriate worker (or resident) classification. For more on taxation and digital nomads, see <a href=\"https:\/\/www.zolo.ca\/blog\/work-from-home-tax-deductions\">What you need to know about T2200 and work-from-home tax deductions<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over two decades ago, many jobs that required a computer and a connection to the Internet required dedicated office space. A variety of professionals, including data entry specialists, writers, editors, accountants, HR personnel and even graphic artists would congregate in a work environment to perform their tasks. Then computers got smaller; computer memory got larger;&hellip;<\/p>\n","protected":false},"author":3,"featured_media":15448,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[2173,15138,15136,15137],"guide":[],"class_list":["post-13499","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","tag-contractor","tag-digital-nomad","tag-freelance","tag-work-from-home"],"acf":[],"zolo_excerpt":"","_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/13499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/comments?post=13499"}],"version-history":[{"count":21,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/13499\/revisions"}],"predecessor-version":[{"id":25292,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/13499\/revisions\/25292"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media\/15448"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=13499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/categories?post=13499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/tags?post=13499"},{"taxonomy":"guide","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/guide?post=13499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}