A contractor relationship refers to assignments, i.e. short-term work tasks or “gigs”. Contractor relationships are based on contracts between principals (customers) and workers (service providers). These contracts are known as service or subcontracting agreements. Contractor relationships do not entail any fringe benefits of employment relationships.
Contract of service
For each assignment, you can make an oral or a written contract of service. It is advisable to draft a written contract.
You can use a company template for the contract, but even an informal email serves as a written contract. Typically, a contract of service specifies:
- The parties: the principal and the contractor(s)
- The content and schedule of the assignment
- The pay and the basis of payment, e.g. by assignment or by the hour
- Value-added tax (VAT): you must pay VAT if your annual turnover exceeds a certain limit (15,000 euros in 2022).
- Compensation for expenses, e.g. travel expenses or material costs
- Terms and/or schedule of payment, a potential advance payment
- Consequences of potential delays, etc.
You issue an invoice for the assignment. You can find more information on invoicing and light entrepreneurship in The Gig Work Guidebook sections “How do you issue an invoice?” and “Light entrepreneurship”.
https://www.vero.fi/en/businesses-and-corporations/business-operations/employee-or-selfemployed/
https://www.tyosuojelu.fi/web/en/grey-economy/contractor-s-obligations-and-liability