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Independent Contractor Agreement Template
Contractor agreement with SOW, fees, IP assignment and insurance clauses, plus a classification checklist covering the IRS, DOL, ABC test (AB5), and IR35.
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What you get
- 13 clauses with sample wording, from scope of work to governing law
- A statement-of-work table with deliverables, dates, and acceptance criteria
- A classification-risk checklist using the IRS common-law test, DOL economic-reality test, ABC test, and UK IR35
- A W-9 and 1099-NEC admin checklist for US contractors
- Notes on why 'work made for hire' language alone does not transfer IP from a contractor
Template preview
A preview of the structure. Download the PDF or CSV for the complete, ready-to-use version.
Parties and engagement
- Client (company) legal name and address
- Contractor legal name— Individual, or the contractor's LLC / limited company
- Contractor business address and tax ID— EIN or SSN on the W-9 (US); company number and VAT number (UK)
- Effective date and end date— Or 'on completion of the SOW'
1. Statement of work (SOW)
Attach one SOW per project. Describe results, not how the contractor spends their day.
| Deliverable | Description | Due date | Acceptance criteria | Fee |
|---|---|---|---|---|
| Brand identity package | Logo, color palette, type system, 20-page brand guide | 2026-11-15 | Two revision rounds; final files in AI, SVG, PNG | $6,000 |
| Website copy | Home, pricing, and 4 product pages | 2026-12-01 | Approved by marketing lead within 5 business days | $3,200 |
2. Fees, invoicing, and expenses
The Client will pay the Contractor [the fixed fee / milestone fees / $X per hour or day] set out in the SOW. The Contractor will invoice [on completion of each milestone / monthly in arrears], and the Client will pay undisputed invoices within [30] days of receipt. The Contractor is responsible for their own business expenses unless the SOW lists pre-approved reimbursable expenses, which must be supported by receipts. The Contractor is responsible for all taxes on fees received, and the Client will not withhold income or payroll taxes except where required by law (for example, US backup withholding if no valid taxpayer ID is provided).
3. Independent contractor status
The Contractor is an independent business and not an employee, partner, or agent of the Client. The Contractor controls the manner, means, hours, and location of the work; supplies their own tools and equipment; may hire assistants or subcontractors at their own cost [with the Client's approval for access to confidential information]; and is free to provide services to other clients. The Contractor is not eligible for the Client's employee benefits, and the Client will not provide workers' compensation or unemployment insurance coverage for the Contractor.
The label does not decide status. Calling someone an independent contractor in a signed agreement carries little weight if the actual working relationship looks like employment. The IRS, the Department of Labor, state agencies, courts, and HMRC all look at how the work is really done. Misclassification can bring back payroll taxes, overtime, benefits, penalties, and interest. This template is not legal advice; check with employment counsel in your jurisdiction.
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How to use this template
- 1
Run the classification check first
Work through the classification checklist before drafting. If most answers point to employee status, hire the person as an employee or through an employer of record instead of papering it as a contract.
- 2
Write a specific SOW
Describe deliverables and outcomes, not hours and tasks. A scope that reads like a job description is one of the first things an auditor looks at.
- 3
Set fees and invoicing
Choose fixed fee, milestone, or hourly/daily rate. Contractors invoice you; do not run them through payroll or give them a timesheet.
- 4
Collect tax paperwork
Get a signed W-9 before the first payment for US contractors, and track payments so you can file Form 1099-NEC by January 31.
- 5
Review annually
Re-check classification whenever the engagement renews, extends past a year, or the contractor starts working like staff.
Frequently asked questions
Does signing an independent contractor agreement make someone a contractor?
No. Agencies and courts look at the real working relationship, not the title on the contract. If you control how and when the person works, pay them like staff, and they do core work with no other clients, they are likely an employee regardless of the agreement.
What is the difference between an independent contractor agreement and a consulting agreement?
Very little legally. 'Consulting agreement' usually signals advisory or professional services, and 'freelance contract' usually signals creative or project work, but all three set out scope, fees, IP, confidentiality, and contractor status. The classification rules are the same for each.
How does the ABC test under California AB5 work?
A worker is presumed to be an employee unless the hiring company proves all three prongs: the worker is free from control, the work is outside the usual course of the company's business, and the worker runs an independently established business of that kind. Prong B is the one most companies fail. AB5 includes exemptions for certain professions and business-to-business arrangements, each with its own conditions.
Who owns the work a contractor creates?
The contractor does, unless the agreement transfers it. For most deliverables, a 'work made for hire' clause alone is not enough under US copyright law, so the agreement needs an express assignment of IP to the company. Pre-existing tools the contractor brings should be licensed rather than assigned.
When do I need to issue a 1099-NEC?
When you pay a US non-employee (other than most corporations) at or above the annual threshold for services in the course of your business. The threshold was $600 for payments through 2025 and rises to $2,000 for payments made in 2026 and later. File with the IRS and furnish the contractor's copy by January 31 of the following year.
What is IR35 and does it affect UK contractors I hire?
IR35 is the UK's off-payroll working rules for contractors who work through their own limited company. If your company is medium or large, you must assess whether the contractor would be an employee if engaged directly and issue a Status Determination Statement. If they are inside IR35, the fee payer deducts income tax and National Insurance.