Is Freelance The Same As Self-Employed?
Are self-employed and freelance the same thing? Let’s find out!
Is freelance and being self-employed the same thing? Let’s start with what exactly those two terms mean.
What Is Self-Employment?
Based on the definitions commonly found in several regions, it can be summarised that self-employment is divided into three categories; sole proprietorship, independent contractors, and partnerships. A self-employed person tends to be the primary operator of their businesses and go through a different set of taxation rules compared to businesses operating with employees.
For a self-employed business, you are your own boss and your own employee. The taxation, insurance, career growth, bookkeeping, marketing and deliverables will be the person’s full responsibility. This can also be called a ‘solopreneur’, the combination of going solo and being an entrepreneur. This means you are the sole operator of a business registered under your name.
What Is Freelancing?
Freelancing is where a person generates their income on a per-task or per-project basis. While most freelancers work on short-term jobs, some have built credibility and retained long-term clients, making a reliable and steady income.
What attracts a person to become a freelancer is the ability to set their own work hours, with different working styles, and manage a better work-life balance. This is incredibly enticing for family-oriented people or those who are at their best at their own pace. A freelancer can also choose to work alone or within a team to complete the job.
Remote freelancers prefer to do their work in their own homes, also known as work-from-home (WFH) or work-at-home (WAH), or those who’d like to travel while working, known as digital nomads.
Remote freelancing tends to be the preference of digital freelancers, namely those with writing, software development, cybersecurity, and data analytics skills. However, some do onsite services on a requirement or contractual basis, such as needing to configure physical security according to cybersecurity benchmarks or setting up dedicated data servers in accordance with data logging needs.
With digitalisation, remote and digital freelancing has been at the forefront, but that doesn’t diminish offline opportunities. E-hailing, runners, pet-sitting, housesitting, caregiving, travelling nurses, and even consultants are forms of freelancing too.
Having prior experience before venturing into freelancing does give you leverage to get higher-pay opportunities. Still, for those who have no experience, there is an abundance of entry-level jobs to make a head start. Among them are transcribing and data entry, to name a few. If you decide to go further, many courses are available online to upskill yourself.
Is Freelance Self-Employed?
The description of freelancing fits the second type of self-employment; independent contractors. When you are doing it full-time, you will have the flexibility to manage your freelancing work schedule and negotiate, making it a form of self-employment.
Legally, many would test the waters by doing this and declare it as a side income for taxation purposes. Once they have a more stable footing in the freelancing industry of their choice, it is then they will register as a sole business or independent contractor.
Can freelancing be a full-time career?
Yes! A resounding yes. Some would leap into freelancing, hustling from the ground up as a registered solopreneur, while some would wait until their side hustle started to generate more income than their primary job. Whichever methods they choose, both will lead to a full-time freelancing career. Once it does, you can consider yourself self-employed.
Are Freelancers The Same As Employees?
A common misconception on both sides is that when you take on a project, you are working for them. When you offer your services to a potential client, you get to propose the time required to finish the job, what skills you can offer, and what you can’t, with further discussion and amendment.
Your relationship with your client is less employee-employer but more contractor-client. You work with them, not for them. If they demand beyond what you offer and are against your binding agreement, you have the right to decline and dispute.
As a freelancer, you may work in teams for the duration of the project, which may provide you with certain clearance as a temporary employee. Nevertheless, by definition itself, a freelancer is not considered a full-time employee. If you do sign an employment contract, complete with its benefits, perks, and monthly stipulation, then you have transitioned to an employee or remote worker.
This isn’t the only thing many got wrong about freelancing. For other misconceptions, head on to 5 Most Common Assumptions about Freelancing.
Is Freelance The Same as Self-Employed?
As we compared and defined, the clear conclusion is that freelance is a form of self-employment. You entirely direct your career growth, and everything is under your control. Right from getting the jobs, marketing your skills, and negotiating the rates, to the annual income tax and bookkeeping.
Is Freelance Worth It?
The best way to answer this is to find out: Why do some choose freelancing over full-time employment?
Below are among the common reasons many seasoned freelancers made this decision, and some may resonate with you:
- You prefer to expand my skills compared to growing hierarchically.
- You like to try new opportunities while your current job scope is constrained.
- You want to travel while doing your job.
- You like to focus and communicate about your work and have less obligation to participate in social gatherings or after-work events.
- You have an invalid family member or young children you need to keep an eye on, but you can’t afford them or are worried about hiring caregivers for them.
- You feel you are often exploited for unpaid overtime time and time again kept being on-call to the point of exhaustion or sacrificing your paid time-off and vacation for others.
- You can do better work without having your supervisor or co-worker shoulder-surfing to check on you at all times.
- Your skills expanded exponentially, but your pay is not expanding with it.
- You need a better work-life balance as your current job deteriorates your health.
The main key points that make freelancing a choice are freedom, control, and satisfaction. The flexibility in determining how and when you want to work, in control of the choices in your work, such as with whom and what job scope you want to work on, and the satisfaction of being able to complete projects that you are passionate about and agreed upon, instead of being forced on you by the higher-ups. It’s the choice of slaving away or passionately working.
Before you go
Find out what freelancer you are from the 5 Freelancing Personality Types. Wondering what freelancing skills are in demand? Here are the 6 Top Freelancing Skills You Should Have in 2022. Unsure where you’ll excel? Discover your niche by following How to Find Your Niche. Motivated to start? Head on to our 10 FAQs for Freelancers.
Freelance marketplace: Revolancer