I learnt a while ago that salaries come from a different budget then the project budget. Salaries are an ongoing cost. But a contractor comes out of the project

I learnt a while ago that salaries come from a different budget then the project budget. Salaries are an ongoing cost. But a contractor comes out of the project budget. So since the salary is ongoing and a higher risk (for them), it's priced lower. A contractor the risk is less for them since the project has a fixed budget.