Template
Free Independent Contractor Invoice and Time Tracking Policy Template [Free Download]
Contractor management
Global HR
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Managing independent contractors well means more than finding the right talent. It means setting clear, consistent expectations around how they track their time, create an invoice, and submit it for payment — before any confusion arises.
Without a defined policy, teams end up with inconsistent invoice templates, missing contact information, disputed hourly rates, unclear due dates, and payment delays that damage contractor relationships. This free, customisable template gives you everything you need to define your invoicing and time tracking processes from day one.
What's included in this template
The template covers every element of a professional independent contractor invoicing and time tracking policy, ready to adapt to your team's workflows and local labor and tax laws:
- Time tracking guidelines — whether your team requires contractors to track working hours or focuses on deliverables and deadlines, with options for both approaches
- Billable vs. non-billable work definitions — clear guidance on what counts as billable work, including direct project tasks and approved communication, and what doesn't
- Invoice template requirements — everything an independent contractor needs to include: contractor and company contact information, invoice number, description of services, hourly rate or fixed fee, invoice total, tax identification number, payment terms, and due date
- Invoice submission and verification process — how and where contractors submit invoices, how your payroll team verifies the amount against tracked hours, and how discrepancies are resolved
- Payment processing and methods — payment schedules, supported payment methods, and how to handle processing fees across different regions
- Invoice retention policy — how long electronic invoices are stored for tax and audit purposes, in line with local legal requirements
- Dishonest time tracking policy — what constitutes a breach and what disciplinary action applies
Who will benefit from this template
- Team leaders and managers overseeing remote or distributed teams with a mix of independent contractors and employees
- HR and People Ops teams building out a contractor onboarding process and looking to standardise invoicing expectations from the start
- Finance and accounts payable teams looking to reduce invoice errors, disputed amounts, and late payment cycles
- Operations teams managing contractors across multiple countries with different local labor and tax requirements
FAQs
What should an independent contractor invoice include?
A complete contractor invoice should include the contractor's name and contact information, the company's contact information, a unique invoice number, the invoice date and payment due date, a description of services provided, the quantity or hours worked, the hourly rate or fixed fee, the invoice total, a tax or business identification number, and the agreed payment terms.
Missing any of these elements — particularly the due date or contact information — is one of the most common reasons invoices get delayed in accounts payable.
Do independent contractors need to track their working hours?
It depends on the type of contract. Contractors billing at an hourly rate typically need to track time and submit a timesheet alongside their invoice to verify the hours billed. Contractors on fixed-rate or milestone-based contracts may not need to track hours at all, since payment is tied to deliverables rather than time worked.
This template includes provisions for both approaches — your team can select the option that fits your contractor agreements and remove the other.
What payment methods can be used to pay independent contractors?
Common payment methods include direct bank transfers, SWIFT international transfers, digital wallets, and online payment platforms. For international contractors, exchange rates and transfer fees vary by method — it's worth agreeing in the independent contractor agreement on who covers any payment processing fees and which method works best in the contractor's region.
Deel supports payments to independent contractors in 200+ currencies across 15+ payment methods, with automated invoicing that removes the need for manual invoice creation and submission entirely.
How long should invoices be retained?
This template defaults to retaining electronic invoices for the last six financial years plus the current year, which aligns with common tax and audit requirements in many jurisdictions. You should confirm the specific retention period required under your local tax laws and adjust the template accordingly before sharing it with contractors.
Can this template be used for contractors in different countries?
Yes — the template is designed to be customised to reflect local labor laws, tax laws, and your team's specific workflows. Because the definition of an independent contractor and the rules around invoicing, tax identification numbers, and record-keeping vary by country, it's strongly advisable to review the completed policy with a legal professional before including it in your contractor onboarding process.