Daisy Warner

Daisy Warner


September 13, 2023

What to consider before creating a freelance contract

This article provides an overview of freelancers and their contracts, their legal rights, and how this compares to permanent employees and consultants

What to consider before creating a freelance contract

An employer’s obligations will vary depending on the type of contract they have given their employees. Possible contract types include:

This article provides an overview of freelancers, including the advantages and the current statistics of freelance work. It also looks at what employers must include in freelance contracts, freelancer rights and how their contracts compare to full-time employees. 

What is a freelancer?

Freelancing is a type of self-employment where a freelancer delivers their services on a contract or project basis for any size company. Some people may freelance as their full-time job, or part-time alongside other work. 

Freelance work allows for flexibility – an advantage both for the employer and the worker themselves. Freelancers may be highly skilled in a certain area or field or may serve broader areas meaning they can potentially cover more ground when it comes to project work for clients.  

Statistics of the number of freelancers

Research from FreelanceUK shows that the number of people seeking freelance work increased from under 10% at the start of 2022, to over 30% in the second half of the year (2022). This growth is at odds with the overall decrease in those who were self-employed in the UK during the COVID-19 pandemic. 

Overall, there is a growing demand for flexible and project workers to fill in staffing gaps. 

What freelance contracts include

A freelance contract is a legally binding agreement that outlines the terms and conditions of any project between a freelancer and the client.

Below are some key areas to consider when creating a freelance contract:

  • the scope of work/ project
  • the specific requirements to complete project
  • services the freelancer provides/does not provide
  • the term of the project/ work i.e. the period of time the freelancer can expect to be working with the employer for
  • the expected timeline of deliverables i.e.  the services offered to the client completed and delivered at various stages throughout the project 
  • overall deadline for a specific project 
  • payment terms, including when the freelancer can expect payment and how much compensation they will receive for the project
  • intellectual property rights for both parties to protect assets and work
  • a clause to define extra work on top of scope already provided (referred to as scope creep), and how that will be compensated
  • termination clause for both parties, if necessary 
  • non-disclosure agreements for the freelancer to be aware of what information can be shared outside of the project 

Freelancer rights

Despite a freelancer not having rights to contractual sick pay or leave, they still have legal rights at work, including:

Differences between freelancer contract and a permanent contract 

A freelance contract differs from a permanent contract in the following ways:

  • Employment status: Freelancers are self employed whereas permanent employees are employed by the company 
  • Tax and other payments: Freelancers manage their own tax and National Insurance contributions, whereas the employer does this on behalf of a full-time employee.
  • Employee rights: Freelance workers not entitled to same rights as permanent employees, such as minimum pay, or sick leave entitlements. 

Differences between freelancers, contractors and consultants

Below are the key differences between a freelancer, a contractor, and a consultant.

Freelancers and contractors

While freelancers and contractors are terms that may be used interchangeably they do differ in the type of work they perform. Freelancers tend to work on multiple projects, at a time, which may also be for different clients. Whereas contractors typically work for one client at a time, and they determine the scope of the project. 

Freelancers and consultants

Freelancers are hired on a project-by-project basis while consultants are given a much broader scope for projects they work on. Freelancers are self-employed, whereas consultants may work as employees for private companies and in the government sector. 

Consultants and contractors 

Contractors are responsible for completing a project within a certain deadline. However, consultants may have an ongoing relationship with clients, providing support and advice over a longer period of employment.

About Legislate

When hiring, it is important to have legally sound employment contracts in place to protect the employers and employees, as well as freelancers, consultants and contractors. With Legislate, you can easily tailor lawyer approved agreements to suit specific contract needs, and easily extract relevant data from these agreements. Book a demo or sign up today.

The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.

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