The label determines your protections, your tax and what happens when the work stops.
What changes
- Employee: notice period, paid leave, sick pay, statutory contributions, unfair dismissal protection
- Contractor: higher rate, own tax and invoicing, no leave, contract can usually end with short notice
Watch for misclassification
If you work fixed hours, use their equipment, report to their manager and cannot send a substitute, you look like an employee regardless of what the contract says. Several countries enforce this actively.
Decide with open eyes
Contracting is a reasonable choice at a rate that covers what you are giving up. It is a bad deal at employee rates.
Common questions
Can a foreign company employ me directly?
Only if it has a local entity or uses an employer-of-record. Otherwise it must engage you as a contractor.
Is contractor status bad?
Not inherently, if the rate reflects the lack of leave, notice and benefits.