Freelancer or Employee: Your Arguments
The work you do may be the same whether you are a freelancer or a full-time employee, but the money and lifestyle can be dramatically different. What is the best working location? We asked you , and these are some of the best arguments you gave us.
Employees receive stable income and benefits
Most of the arguments for becoming a W2 employee involved regular pay and benefits like health insurance, 401k compliance, and paid leave. These are the things that freelancers must pay for themselves and factor in their rates if they want to be at least on par with employees doing the same job. However, for the employees, all these details and costs are borne by themselves. Lifehacker reader noneOther says :
Freelancing can work for certain people, but after a year and a half, I returned to the corporate world.
Health issues, taxes, self-promotion, vacation pay, retirement benefits, etc. I just didn’t want to deal with the complexities anymore.
I work for this person again, but life seems more enjoyable.
By far the best reason to work for a company is for regular income. As a freelancer, you can make $ 8,000 a month, but it could be $ 500 next month. If your finances are poor, be careful.
Freelancers need different and more sophisticated budgeting strategies than those who receive a regular salary. Freelancers cannot even count on unemployment insurance if they cannot find work.
Freelancers have the highest income
When you are freelancing, you can work as much or less as you like. You set the rates yourself and do not have any restrictions on income. If you manage to find good clients, the salary can be much higher than what you would get as an employee in the same field. Myrna Minkoff shares :
Any successful freelancer charges 2x or more of the hourly rate an employee would receive for the same job.
I just got an invoice for a job at about $ 250 an hour. I am a writer. It would be hard to find a 9-5 writer, making $ 500K, doing the kind of work I do. (Of course, I don’t have 40 hours a week for this kind of work either. But then I don’t need it.)
As a freelance colleague, I can attest that earning money is a much higher freelance job than what you would be offered as a full-time employee at one company. It can also be much lower, especially when you are just starting out, so give yourself time to enter the market – even years. But if the opportunity to make more money is what you most need, freelancing is the best option if you’re willing to work for it.
Taxes are a pain for freelancers, but at least we get the opportunity to deduct our business expenses
It’s good that freelancers have the potential to make more money because they have more expenses and also have to deal with higher taxes. You owe not only income tax, but also self-employment tax, and calculating and paying taxes throughout the year is much more difficult than deducting them from each salary. CPA EvanrudeJohnson says:
1099 freelancers almost always have to pay indicative taxes, and it takes discipline to keep one third or more of your paycheck and then pay it back to the government a few months later.
While taxes are more difficult for freelancers, we can write off even more, which may offset the additional self-employment tax we have to pay. Commercial use of your home makes a huge difference: if you have a separate home office for your freelance business, you can deduct some of your mortgage, utilities, and other home-related expenses. (In contrast, employees are only allowed to deduct their home offices if they work from home “for the employer’s convenience” – that is, they forced you to work from home). All the little things add up too, from inkjet cartridges to books you bought to advance your career, or drinks you drank with a client to discuss a potential project.
Employees can climb the corporate ladder
When companies promote or invest in the professional development of their teams, they usually don’t take freelancers into account. As Snottrockett notes , full-time employees have a clearer career path in their companies:
Full time offers consistency, usually standard benefits, and some level of security, provided you don’t screw it up. If you want to climb the corporate ladder, provided the situation allows it, you should do full-time (you have to be careful with this … Glassdoor can be your bromance – a great way to find out what a company is like, from happy and unhappy employees, current and past). The only time to worry is if there are major changes with the client (acquisition, management staff) that could affect how or if the agency does business with them.
Another advantage is professional development. yes, you can do it yourself, but if your employer pays for Lynda.com or Treehouse or attendance at $ 1,000 seminars …
On the other hand, I suppose if you are a freelancer, are you already at the top of your own ladder?
Freelancers have more opportunities to work
Part of the appeal of going freelance is the ability to decide what to work on and also have a wider range of project opportunities than working for just one company. Regodamus says :
Stable employee work is good, but I would be happy if I was lucky enough to be able to independently choose what I work on. I understand that you have to line up options in order to choose from yourself, but if you have them, you have some freedom to work on what you like best.
Plus, if you’re having a hard time finding a full-time job, freelancing may be the solution. Sage calls himself unemployed (doesn’t always show up on time, doesn’t like socializing while working, etc.), but he does a great job, so he freelances. The villain is “old and white” and therefore turned to freelance because of the lower chances of getting a full-time job.
Employees have more social support and interaction
Office workers have one thing that telecommuters and freelancers don’t have: the usual bunch of people you see (in person!) And potentially make friends with. Kovarr notes :
For me, being a traditional employee means going to the same place of work every day, meeting the same people every day, and becoming good friends with them. Perhaps not typical, but the time spent with my colleagues in the break room, at the water cooler, and even next to each other at our tables is a rather important part of my social life. I would be afraid to lose this as a freelancer.
Having friends at work makes work more enjoyable .
Freelancers are more flexible in their lifestyles and don’t have to deal with office politics
Most freelancers choose where and when to work. This is a great boon if you have children or health problems. Yorkshiretealover says:
It gives me great pleasure to be with my son 24 hours a day, 7 days a week (except when he is at school). If I were working a full-time job, I would leave home while he was still asleep and return home immediately after his arrival.
While many employers offer flexible working hours, not all do, and for many it is beneficial.
Plus, when you’re a freelancer, you don’t have to deal with office politics and unnecessary drama .
Employees have less job security
An employee provides stability and consistency, but job security is not guaranteed. It can be argued that employees have less job security because they only have one “client” – their employer – compared to freelancers who have multiple clients. SergioAM shares :
The reason I love freelancing is because you are constantly on your toes, you fight harder, appreciate the little things, and learn more. Due to downsizing in my last full-time job, I realized that full-time employment gives you a false sense of security . At least that was the case for me. You get stuck thinking that you are guaranteed that amount of money every two weeks, you have medical care, 401k [paid] vacations / vacations, coworkers are starting to turn into friends, you get along really well with top leaders, etc. D.
You start to feel secure in this bubble.
Then, when it bursts, everything collapses and you feel completely helpless.
This is why we recommend looking for a new job often, even if you like it , be it an employee or a freelancer.
Freelancers should be beginners and always look for a new job
When you work as a freelancer, you will always be on duty and most freelancers will have to constantly promote themselves and look for new jobs. Not only that, you might have to chase customers just to get paid. Taco Fortress points out this flaw:
You have to start acting on your own, develop your business and deal with the unenviable task of getting money. There are unscrupulous clients who will pay late or will try not to pay you at all. With a regular salary, you are much less likely to get tough.
Many readers said that the lack of confidence in finding clients, as well as the need to eavesdrop on clients in order to get paid, make them a full-time employee.
Working from home as an employee can be the best of both worlds
Former freelancers like colorists and those who have been seduced but repulsed by the marketing prospect of freelancing like Fairboxie say work from home is the best solution. You get the opportunity to work from home with the stability and benefits of an employee. As a former homeworker and current freelancer, I tend to agree, but you have to be careful to avoid stagnating your career or work – something is more likely when you work from home than if you work freelance.
Also, some people just don’t like working from home. These are not all rainbows and unicorns .
Know your personality and goals to choose the best path
Corey Edwards claims the answer is simple:
The only “tricky” part of this question is that people tend to have a hard time deciding what they really want. They tend to try to answer the question in one way or another, rather than simply deciding what they want from their job. Define that part first and then decide which path gives you the most of what you want.
Simple.
Then, it’s OK!
Perhaps the Codex archaeologist said it best:
If you love money and can be extremely organized and disciplined … then 1099 is for you.
If you like stability and don’t want to think too much about details … then W2 is for you.
Or you can try freelancing part-time while you are working to see which option is best for you. Maybe both?