Do Remote Contractors Get Benefits, Holidays or Sick Pay?

One line in a contractor agreement does a lot of work: "Contractor is not entitled to employee benefits." It means the costs an employer normally covers become yours.

What contractors usually don't get

• Paid holidays and public holidays.
• Sick pay.
• Employer pension or retirement contributions.
• Employer-provided health insurance.
• Parental leave paid by the employer.
• Severance when the contract ends.

What you can arrange yourself

In many countries self-employed people can join public health and pension schemes voluntarily or are required to. Private health insurance, income-protection insurance and personal pension plans are available almost everywhere, at a cost. The point is not that contractors cannot have these things, but that they pay for them directly.

Paying yourself for time off

If you want four weeks of holiday a year, the other forty-eight have to fund them. A practical approach is to set aside a share of every payment into a 'time off' fund, alongside your tax savings. That way a week away does not mean a week without income.

Employer of record arrangements

Some companies hire international staff through an 'employer of record' — a third party that employs you locally on the company's behalf. These roles do come with local employee benefits. They are usually long-term positions rather than project work, and listings say so explicitly.

Building your own safety net

Contractors who stay comfortable over the years usually set up three funds early: one for tax, one for time off and one for emergencies. A common split is to move a set percentage of every payment into each as soon as it arrives — enough to cover a few weeks of leave a year and two to three months of expenses for emergencies.

Insurance is the other half. Health cover, income protection and, depending on your work, professional liability insurance are worth pricing in your first months. The cost varies a great deal by country and age, which is exactly why it belongs in your rate calculations.

Pricing it into your rate

When you compare a contract with a job, or decide whether a rate is worth taking, add up what these protections cost you each year and divide by your expected hours. That figure, added to your basic needs, is the minimum hourly rate that leaves you no worse off than an employee.