Last Updated September 19, 2024
What is an Independent Contractor Agreement?
An Independent Contractor Agreement is a legal document that outlines the terms and conditions of a working relationship between an independent service provider and their client.
Use LawDepot’s free and easy-to-use template to create an Independent Contractor Agreement for any services provided in Ireland. If you are located in the United Kingdom, use our UK-specific template.
Who can use an Independent Contractor Agreement?
Either the client or the Independent contractor can create an Independent Contractor Agreement for the other party to review and sign.
LawDepot’s Independent Contractor Agreement can be customised to create a document that outlines services in several industries, including:
- Construction and building
- Professional services, such as consulting
- Transportation
- Administrative services
- Health and wellness, such as cleaning services
- Other industries, such as computer services or food catering
Remember, an Independent Contractor Agreement should only be used for contracts that outline services between an independent contractor and a client. If you are documenting a working relationship between an employee and an employer, use an Employment Contract.
What should be included in an Independent Contractor Agreement?
When drafting your Independent Contractor Agreement, here’s what you need to include:
- Names and addresses of both the independent contractor and the client
- Description of the services provided, including the duration
- Payment, expense, and billing details
- Termination clauses
- Confidentiality and intellectual property clauses (if applicable)
- Any additional relevant information
What is the difference between independent contractors and employees?
An independent contractor is an individual or business entity who works for themselves and provides services to clients. Usually, Independent Contractors are freelancers who offer specialized skills.
Independent contractors are different from employees for various reasons. For example, independent contractors work for multiple clients, set their own working hours, and use their own tools and equipment. These terms are set out in an Independent Contractor Agreement.
On the other hand, employees are paid to work for one employer, who sets the employees working hours and provides the employee with any needed equipment to complete the job. These working conditions are set out in an Employment Contract.
It is important to clearly distinguish between employees and independent contractors to avoid worker misclassification. In the next section, we’ll explain how Ireland differentiates the two categories of workers.
Independent Contractor Laws in Ireland
In Ireland, the status of workers is governed by the Code of Practice on Determining Employment Status.
To determine if an individual is considered an independent contractor rather than an employee, Irish law uses a five-factor classification test:
- Mutuality of obligation: The independent contractor is not required to accept and complete work.
- Substitution: The independent contractor can delegate work to a subcontractor.
- The enterprise test: The independent contractor operates their own business and makes profits and losses.
- Integration: The independent contractor is not an integral part of the company they’re performing work for.
- Control: The independent contractor controls how, when, and where the work is done.
You can find more information about the tax differences between employees and independent contractors on the Irish Tax and Customs website.