The Bureau of Labor Statistics (BLS) reports that one in every ten workers in the US works for themselves. That means over 9 million workers in this country classify as freelancers or independent contractors.
Does this work scenario sound appealing to you? If it does, then check out this helpful article on the meaning of freelance or independent contractor status. Then you’ll know if this career field is the right one for you.
What’s the Meaning of Freelance Work?
The best way to remember this answer is that freelancers (sometimes called independent contractors) work for themselves. A company hires this kind of professional that provides a specialized service at their own expense.
Freelancers provide their services on a contractual basis. They work only when the employer needs them. Employers are also not obligated to hire the freelancer as a permanent employee once the job is done.
What is Freelance Work?
Some examples of the types of freelance jobs out there include the following:
- Administrative assistants
- Data entry
- Transcriptionists
- Copywriters
- Proofreaders
- Photographers
- Videographers
- Web designers
- Accountants
- Social media marketers
Freelancing: Pros and Cons
Here is a closer look at the advantages and disadvantages of this employment model. Consider these factors when deciding if this career choice is right for you.
Advantages of Freelancing
As a freelancer, you bring specialized expertise to whatever job you take. This could make you very competitive and highly sought after. Employers know they won’t have to train you like they would with regular employees.
Freelancing might also guarantee an interesting and always-changing workday. Most freelance work involves limited-term projects. One day you might be designing a website, the next day you’re writing blog posts.
Another benefit to freelancing includes having direct control over your work. You are the boss on this job site, answerable only to your client.
You have control over hiring any subcontractors needed and what time you start and end your workday. Your only requirement is to finish the job before the due date.
Disadvantages of Freelancing
Freelancers must pay their own self-employment taxes, including social security, Medicare, and other federal withholdings. Independent contractors are responsible for saving enough money to pay these taxes that are roughly around a 12 percent tax rate.
Independent contractors pay these self-employment taxes using a federal Form W-9. Check this resource for more information on taxes for independent contractors,
When you become your own “boss” there are also other responsibilities that come with doing business (that you are responsible for, not your job client.) Independent contractors have to secure their own professional licensure. They are also responsible for independent contractor liability if projects go wrong.
What’s Your Next Step?
It’s vital that you understand the meaning of freelance work before you launch this business model. If you don’t have the right skills or level of self-discipline, freelancing may not be the right fit for you.
Meet with your bookkeeper. Review your revenues to see if you can cover your licensing fees and amounts necessary for your self-employment taxes. This may be the best first step for you.
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