Nowadays, a company’s workforce may consist of several types of employment, from consultants to temps, freelance workers to independent contractors and their regular employees. Temps are usually hired for seasonal work or whenever needed, and regular employees work year-round.
At present, there are certain fields and professions that freelancers or contractors are more in demand or are prevailing. These fields or professions include music, writing, computer programming, web, and graphic design, film and video production, and translating. In a study made in 2018 by Mckinsey, 162 million people in Europe and the United States are doing independent work. That’s 20 to 30 percent of the working population.
There’s a difference between freelancers vs contractors; they might seem similar, though. Still, freelancers are workers that are self-employed. They tend to work from home or their own space and usually work for several clients on various projects, often simultaneously. Contractors are also self-employed workers, but usually, a contractor will work for one client full-time for a set period, often in the client’s office. Usually, they are more prevalent in the IT industry. There might be differences between them, but both have similar advantages and disadvantages.
You have a client to work for, but you are your own boss. You can decide how, when, and where to work, for as much or little time as you want. You also determine your own rate, depending on the skills and quality of work you provide. You can also have multiple clients as you want to earn more, as long as you can keep up with the demand for work.
Lower Income Taxes
There are benefits in paying taxes when you are a freelancer or an independent contractor. For instance, no taxes are withheld from your paychecks. You hang on to your money longer before you have to give it over to the IRS, and it’s up to you to decide how much estimated tax to pay, but take note that there are penalties when you underpay. But this flexibility provides more control over your hard-earned money.
When you’re a freelancer or an independent contractor, you don’t have job security. Usually, as long as the project or the needed job is done, then so is your work. And not having clients will, of course, affect your pay.
Freelancers and independent contractors don’t enjoy the same benefits an employer provides to their regular employees. Such as health insurance, paid vacations, year-end bonuses, or retirement benefits, so as a freelancer, you must acquire your own health insurance and ensure that you can pay for it monthly or annually.
Being a freelancer or independent contractor, or as anything in this world, there will always be advantages and disadvantages. You have to choose what’s best for your lifestyle and face the difficulty or troubles that you may come across.