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The Freelancer Employee Dilemma: What’s the Difference?

SEO Question is a freelancer employee

The gig economy is on the rise. According to a recent study, 34 percent of American workers are either independent contractors and freelancers or self-employed. This number is only going to continue to grow in the years ahead. So, what’s the difference between freelancers and traditional employees? Let’s take a look.

What is a freelancer?

A freelancer is a self-employed person who is not tied to any employer and is contracted to do short-term work for a set fee. Freelancers can be found in various industries, such as writing, marketing, web development, and more. In addition, freelancers usually work on a project or task basis and have multiple clients.

Freelancer or Freelancer Employee benefits.

Freelancer work has excellent benefits, like the ability to remotely work and set your work hours. These are vital benefits for someone who has to balance other commitments, such as family or school. Freelancing can also be a great way to earn extra money on the side if you work full-time or part-time for a business.

The downside of freelancer work

Some challenges come along with freelancing. For example, a freelancer is responsible for finding clients and negotiating their rates. They also need to be good at managing their own time and organizing their work schedule. And since a company does not employ them, they don’t have access to certain employee benefits such as employed pay, retirement planning, and paid vacation.

What is an employee

Employees are individuals a company hires to work for them in exchange for hourly rates or salaries. Employees typically work set hours. They may also be eligible for overtime pay, depending on their job classification and the number of hours they work within a week.

Benefits of traditional employment

As a full-time Freelancer employee, you’ll receive a stable income that can be relied on to cover your bills and other expenses. This stability can be beneficial for those with families to support. Secondly, traditional jobs usually come with benefits such as health insurance, dental coverage, and 401k plans. These benefits can be precious if you rely heavily on medical care or want to save for retirement. Finally, traditional jobs may provide career growth opportunities for hard workers, such as promotions or an increase in salary or hourly rates.

The downside of traditional employment

One of the disadvantages associated with being a full-time worker is the amount of employment tax you will have deducted from your paycheck. Employees must typically pay Social Security, Medicare, and state and federal income taxes. You may also be subject to payroll tax used to fund unemployment benefits and a worker’s compensation fund, which helps cover workplace injury costs. 

Another significant disadvantage is that employees must follow the rules and regulations of the organization in which they work. Failure to do so could result in punishment or termination. Also, as an employee, your earning potential could be limited if you’re not in a position to negotiate a higher salary.

Freelancer employee - handy hubb

What is a contractor? 

An independent contractor is an individual who contracts with another company to provide services outside of the normal employee-employer relationship. This type of worker is typically self-employed and responsible for their taxes. Freelancers and contractors are similar, with the main difference being that independent contractors work for clients more long-term and receive additional benefits that freelancers do not. 

Benefits of being a contractor

There are many benefits associated with being a contractor:

  1. Being able to choose the projects you want to work on and the hours you want to work.
  2. Greater financial control over what comes in and goes out.
  3. You can also deduct certain business expenses from your taxable income, lowering your tax bill.

Overall, being an independent contractor offers many advantages and freedoms that traditional employment does not.

The downside of contractor work

The downside of working as a contractor is that you do not have the same workplace rights and protections as employees. This means you are not entitled to minimum wage, overtime pay, or workers’ compensation if you are injured. Additionally, you may not be able to unionize or take legal action against your employer if you feel that you have been mistreated.

In conclusion

Each of these groups has its pros and cons. Freelancers may have more freedom and flexibility but not access to the same benefits as contractors and employees. Employees may have stable and consistent paychecks but are taxed heavily and at risk of being fired or let go at any time with no other source of income. Independent contractors fall somewhere in between these two extremes.

Whether you’re interested in freelance work or think an independent contractor or freelancer employee lifestyle is the way to go, you’re not wrong. Some people thrive as freelancers or contractors, while others prefer a more traditional employment status. The essential thing is to consider all the key factors and what fits your lifestyle best diving into any profession. 

 Helpful resources and information for an aspiring employee, freelancer, or contractor

  • If you’re interested in freelance work, try reading The Six-Figure Freelancer or creating a freelance account on 
  • If you’re interested in finding traditional employment, or indeed are great job resources that can help get you started.