Independent contractors are people who earn their livelihoods from their own independent businesses instead of depending upon an employer to earn a living. They are sometimes called consultants, freelancers, or as being self-employed and even entrepreneurs and business owners. A written independent contractor agreement is used to establish independent contractor status.

Independent contractors are not required to follow, nor are they furnished with, instructions to accomplish a job and no training is imparted to them by the hiring firm. Independent contractors set their own work hours. Usually independent contractors do not have a continuing relationship with a hiring company. The relationship can be frequent, but it must be at irregular intervals, on call, or whenever work is available. Independent contractors shouldn't hire, supervise, or pay assistants at the direction of the hiring company. If assistants are hired, it should be at the independent contractor's sole discretion. Independent contractors are paid by the job, not by time. Payment by the job can include periodic payments based on a percentage of job completed. The method of payment is determined prior to the commencement of the job.

Being an independent contractor has several advantages including tax benefits. No federal or state taxes are withheld from an independent contractor’s paycheck as they must be for employees. Dissimilarly to an employee's work-related deductions, which are mostly limited, an independent contractor, as a self-employed person, can deduct from his/her income tax any necessary expenses related to business, as long as they are reasonable in amount and ordinarily incurred by businesses. An independent contractor can generally deduct office rent and other expenses, including those for home offices, travel expenses, entertainment and meal expenses (subject to limitations), equipment and insurance costs etc.

Independent contractors make their services available to the public by one or more of the following: having an office and assistants, having business signs, having a business license, listing their services in a business directory, or advertising their services.

Independent contractors cannot be fired if they perform the assigned job in accordance with the contract specifications. However, the contractors are responsible for the satisfactory completion of a job and they may be legally obligated to compensate the hiring firm for failure to complete the job assigned.