What Does Contract Basis Meaning

In Nezařazené

Contract basis is a type of employment agreement between an employer and an employee where the duration of the employment is limited to a specific period. This period can either be for a particular project or a set time frame. The employee is usually hired to complete a specific task or project, after which the contract expires. Let’s take a closer look at what this type of employment means.

What is a contract basis?

A contract basis is a type of employment agreement where an employee is hired for a limited time or for a specific project. In this type of arrangement, the employment agreement is outlined in a contract that both parties sign. The contract outlines the terms of the employment, including the duration of the contract, the scope of the work, and the compensation package.

A contract basis is different from permanent employment where an employee is hired for an indefinite period. Contract basis employment is also different from freelance or gig-based work, where a worker is hired on a per-project basis.

Contract basis employment can be used for a wide range of positions and industries. For example, companies may hire an accountant on a contract basis to complete a specific financial audit. Similarly, a graphic designer may be hired on a contract basis to create a company’s marketing materials.

Why do companies hire employees on contract basis?

Companies hire employees on a contract basis for a variety of reasons. Some of the benefits of hiring employees on a contract basis include:

Flexibility: Contract basis employment allows companies to bring in workers for specific projects or periods when they need additional help without committing to a long-term employment agreement.

Cost savings: Hiring employees on a contract basis can be more cost-effective than hiring a permanent employee. Employers are not responsible for providing benefits like health insurance, retirement plans and paid time off to contract employees.

Expertise: Companies can bring in contract workers with particular skill sets for specific projects or tasks that they may not have in-house.

Lower risk: Contract basis employment provides a lower risk for employers. If the project or task is completed, the contract ends. There are no ongoing commitments or obligations beyond the scope of the project.

What are the disadvantages of contract basis employment?

There are also disadvantages to contract basis employment for both employers and employees. Some of these include:

Lack of job security: Contract basis employment does not provide job security as employees are hired for a specific project or time period, which can lead to uncertainty for employees.

Lack of benefits: Contract employees are not entitled to the same benefits as permanent employees. This includes health insurance, time off, and retirement plans.

Limited advancement opportunities: Contract employees may not have the same advancement opportunities as permanent employees. This can make it difficult for them to build a career with the company or gain experience in the field.


In summary, contract basis employment is a type of employment agreement where an employee is hired for a specific project or time period. This type of employment offers flexibility and cost savings for employers, but may lack job security and benefits for employees. Employers need to weigh the advantages and disadvantages of contract basis employment before creating such agreements. Similarly, employees need to weigh the risk and benefits of such agreements, and decide whether it aligns with their career goals.

Recent Posts