Are Freelancers Considered Employees?

The performance gap between freelancers and employees is the most significant barrier for organisations wanting to hire freelancers or traditional staff. Is the difference large enough to choose one option over the other?

Freelancing has paved a new way for working people worldwide seeking financial freedom. More organizations are responding to the trend and hiring a mix of freelancers and full-time staff, and many freelance roles are springing up across industries.

According to Forbes, nearly 90% of large corporations agree that freelancers are critical to their workforce. This post will look at the many types of jobs and the differences between freelancers and employees. We’ll also discuss the advantages and disadvantages of working as a freelancer and as a full-time employee.

What is Freelancing?

A “gig,” or a one-time, short-term assignment or job, used to be something designated for musicians or models. Those days are no longer with us. An increasing number of Americans are opting out of the traditional 9-to-5 grind of working for The Man in favour of working on demand for companies that hire them on a freelance basis.

Today’s professionals can operate as freelancers in a variety of businesses from almost anywhere on the planet, thanks to the miracles of modern technology. Short-term “giggers” can use sites like Upwork and Etsy to write copy, create websites, and even sell their items on their own time and at their leisure. Meanwhile, websites like Airbnb and Onefinestay allow residents to make extra money by renting out their homes. In addition, Uber allows almost anyone (with a car) to convert their vehicle into a metered cab.

Mix and match your gigs, and you’ve got yourself the ultimate work-life balance. In principle, you could “gig” from a mountaintop perch, a log hut, or your own home room, provided you have a laptop and sufficient WIFI access, even in your pajamas. Freelancing also comes with the excitement of not knowing what’s around the corner, but being open to a plethora of other possibilities (just past that lovely sunset you get to enjoy because you’re not confined in an office). Isn’t it all really liberating?

With the growing gig economy (also known as the freelance economy), a critical decision must be made: to freelance or not to freelance. To many, it may appear to be a sensible (if not the only) way of life, but before dismissing salaried work completely, it’s time for a reality check.

Difference Between Freelancers and Employees Working Full-time

Permanency

A freelancer completes a certain task within a specified time frame. Because freelancers are self-employed, they are not bound by any written agreement or contract with their employers. Full-time employees, on the other hand, must sign an employment contract with specific terms and circumstances that are unique to a permanent position. Full-time employees, on the other hand, have a longer tenure and greater job security than freelancers.

Variety

Working a full-time work entails a great deal of repetition. There is a significant difference between freelancing and working as an employee in terms of variety. Freelancers choose the projects they want to work on. They don’t require anyone’s permission to expand into new territory. You can fill your schedule with only the most fascinating and lucrative work as a freelancer, whereas employees are unable to refuse uninteresting assignments.

If you need the afternoon off, there’s no need to bother about receiving approval from the human resources department. You’re free to organize your calendar this way if you do your finest work at midnight at your kitchen table.

Employment benefits

Another notable distinction between freelancers and employees is that, unlike full-time employees, freelancers do not have access to benefits. They are not entitled to paid vacations, maternity leave, annual leaves, or other benefits. Freelancers do not have access to medical insurance or retirement benefits, as do full-time workers.

Employment taxes

There is a significant distinction between freelancers and employees in this regard. Employers must take care of their employees’ taxes before issuing paychecks. They deduct a specific proportion of an employee’s salary as tax, which normally includes social security and healthcare costs. Self-employed people, on the other hand, must pay both personal income tax and self-employment tax.

Working hours

Freelancers and employees have different working hours. While full-time employees often work normal office hours, freelancers work when it is convenient for them. You have no influence over how and when a freelancer works as an employer.

When did we decide that every employee would work eight hours per day, five days per week? Many employers demand that time commitment, as well as others. People who are unable or unwilling to make that time commitment have fewer job possibilities and are more likely to be passed over for promotions when they become available.

You may cut down on ‘butt-in-seat’ time when you manage your own schedule. Outside of work, we all have responsibilities. Self-employment may be the greatest alternative if your schedule necessitates time to care for loved ones or simply for yourself.

Cost differences

Some freelancers are unquestionably wealthy, with daily earnings in the hundreds of dollars. Is this to imply that freelancers are more expensive than full-time employees? While this may be true in some circumstances, with freelancers, the employer determines the assignment and duration. As a result, freelancers are ideal for projects that require more freedom and experimentation. An organization must spend a considerable percentage of its financial resources on salaries, benefits, and other perks for its personnel. As a result, the cost disparities between freelancers and employees may be significant.

Access to office supplies

You may not consider the pen you use, the paper in the copier, the office computers, electricity or the free WIFI to be job benefits, yet freelancers pay for office supplies out of their own money. They must prepare their workstations (computers, desk, chair, WIFI and so on). This has the potential to be extremely costly. Employees, on the other hand, rarely have to worry about any of this because those facilities are normally supplied in the office, and employees who work remotely are usually given a company-issued computer and a data allowance.

Final thoughts

So far, I think it is clear that freelancers are quite different from employees in many ways. Although, because of the rise in the adoption of remote work, some employees come close in aspects like the lack of commute and flexible work schedules. However, they are by no means the same.

When it comes to the freelance vs. employee issue, keep in mind that both freelancers and full-time employees can have a happy existence. Choosing between the two requires assessing the benefits and drawbacks and determining which best fits your ideal lifestyle.

If you’re a full-time employee considering turning freelance, I strongly advise you to start with part-time side work and term projects before going full-throttle. This will offer you a true sense of what freelancing is like without risking your present employer’s stability.

Employers who understand how and when to use freelancers and full-time staff for case-specific activities can also achieve ideal results. The hiring decision is ultimately based on the needs of the employer and the amount of money they are willing to spend on a professional.

Before you go…

Hey, thank you for reading this blog to the end. I hope it was helpful. Let me tell you a little bit about Nicholas Idoko Technologies. We help businesses and companies build an online presence by developing web, mobile, desktop and blockchain applications.

As a company, we work with your budget in developing your ideas and projects beautifully and elegantly as well as participate in the growth of your business. We do a lot of freelance work in various sectors such as blockchain, booking, e-commerce, education, online games, voting and payments. Our ability to provide the needed resources to help clients develop their software packages for their targeted audience on schedule is unmatched.

Be sure to contact us if you need our services! We are readily available.