Contractor Offer Letter — Free Template for Freelance Work

Whether someone is an independent contractor or an employee depends on how the work actually happens, not just what the letter calls them. Agencies generally look at things like who controls how and when the work is done, who provides the tools, and whether the person runs their own business. Tests differ between federal agencies and from state to state.

Misclassifying an employee as a contractor can lead to back taxes and penalties. If the person will work set hours under close direction, using your equipment, for an open-ended period, check the rules carefully or get legal help before treating them as a contractor.

Describe the project or deliverables, the rate and how it's paid (hourly, per project, or per milestone), how invoices work, and the expected end date. Avoid employee-style terms like paid time off, a supervisor, or a required work schedule.

Use the letter as a friendly summary and send a separate contractor agreement that covers ownership of work, confidentiality, payment terms and how either side can end the arrangement. The letter's standard wording notes that a separate written agreement applies.

Negotiation is normal. If the candidate comes back asking for higher pay, a later start date or more flexibility, decide what you can change and send a revised letter rather than agreeing to changes only by phone. The final signed letter should match what you both agreed.

If the deadline passes with no reply, a short, friendly follow-up is usually enough. Ask whether they need more time or have questions. If you still don't hear back, you can withdraw the offer in writing and move on to another candidate.

If the candidate accepts and later changes their mind, or you need to withdraw an offer after acceptance, handle it in writing and promptly. Withdrawing an accepted offer can create problems, especially if the person has already resigned elsewhere, so get legal help first in that situation.