Q:

How do you prepare self-employment contracts?

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Quick Answer

As a self-employed person, also known as an independent contractor, have your contracts with your clients include the work you agree to perform, the payment, and who provides expenses, equipment and workspace, advises Nolo. Stipulate the length of the agreement and possible circumstances of termination, and clarify the relationship between you and your client. Although the Internet has numerous sample agreements, hire an attorney to create one for the specific needs of your business, reports the U.S. Small Business Administration.

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How do you prepare self-employment contracts?
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Full Answer

In the contract, detail the services you provide to the client and whether the agreement lasts for a specific length of time or until you complete the job, explains Nolo. Note whether the payment involves a set fee for the entire job or an hourly wage and whether you receive payment in advance, in installments or on completion of the project. Stipulate possible penalties for late payment. As an independent contractor, you usually supply your own expenses, materials and office space, but if this job is an exception, clarify this in the contract.

Be sure the contract clarifies your status as an independent contractor, specifies that you are not an employee of your client, and mentions that you pay your own federal and state income taxes, according to Nolo. The contract should also clarify that you have your own liability insurance and all necessary licenses and permits. If you perform creative work, clarify whether you or your client owns the copyright on the finished work.

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