Employee vs Freelancer, Which is Better?

While there’s a plethora of motivational online content about being self-employed and enjoying the “freedom” that comes along with it… Is it all true or is it a marketing bluff?


Being an employee (working for someone else)

Let’s talk about the common myths associated with being an employee.

“Being an employee means sitting in an office all day.”

No, not necessarily. While the majority of jobs do require you to stay on premise at the workplace, remote jobs don’t. With a remote job, you can work from home, or elsewhere, depending on the flexibility of the role. Most remote companies have a basic requirement that your timezone overlaps with the other team members for availability when video conferencing and collaborating. But at the end of the day, remote jobs don’t require you to stay at the office.

“Being an employee means you don’t get paid well.”

This is true for many people, but it doesn’t have to be the case for you. Salary is negotiable with employers. If they believe that you’re worth the asking price, you can make a six-figure salary being a remote employee. And yes, that means even as a remote employee. The key is to understand the demands of the market and find the right crossroads between what you want to do and what value the company is looking for. Depending on the type of remote job you seek, salaries can vary greatly. It’s worth checking out websites like Glassdoor to understand the average salary for your desired role.

“Being an employee means having a mean boss.”

Employment is a 2-way contract that you can opt out of at any time. You can (and should) quit the job if you aren’t being treated fairly. If you are good at your craft, there will be other employers waiting to bring you onboard their company.

Does this mean you should be an employee?

You should be aware that even in the world of employment, there’s a level of freedom that comes with it, if you build yourself to be a highly qualified candidate who has negotiating power. Freelancing provides the ultimate flexibility in lifestyle, but there are pros and cons to being a freelancer…


Being a freelancer (working for yourself):

Now let’s talk about the pros and cons of working for yourself as a freelancer.

Pros of Being a Freelancer:

With an estimated 1 billion freelancers around the world, we are beginning to see an economic a shift where more and more people are becoming self-employed. Here’s why:

You can work (or not) whenever you want

When you work for yourself, you can organize your schedule to best fit your ideal lifestyle. Whether you want to work during the day or night, you have the freedom to do so. You aren’t required to ask for vacation time. This is a great path for those who want to achieve the mythical “4 hour work week”.

On the other hand, if you’re a workaholic and you love the thrill of unlimited possibilities and fast growth, then you can work overtime to achieve your goals faster.

While remote employees can sometimes be limited to their employer’s preferred timezone, a freelancer has no restrictions for where they can work.

Potentially higher income- the sky is the limit

Freelancers can charge higher hourly rates than employees because a freelancer is generally a temporary contractor. While an employee might earn $30/hour for a particular job, a freelancer can easily charge $60/hour for the same job, earning the same income for half as many hours!

You can sell the business

If you go a step above being a freelancer and decide to operate a scalable online business, then your potential earnings will grow much higher. Being self-employed means that your business can accumulate value over time. You arne’t merely the sum of how many hours you work.

When you’ve accumulated a large number of paying customers that consistently earn your business profit, then your online business can eventually be sold to someone else for 2x to 4x the annual profit of the business. That means that if you earned $20,000 from your business that year, then you can sell it for $40,000 to $80,000.

You have freedom over the activities you perform

Employees have to do what they’re assigned to do. Sometimes it’s exciting work, but other times it’s tedious or monotonous. As a freelancer, you can choose exactly what activities you want to do to earn money. You can focus in on a particular niche and make a name for yourself.

For example, a freelance graphic designer who loves dogs can choose to work with various animal shelters and animal advocate groups. While a computer programmer who loves video games can choose to work alongside game development companies.

You are the boss

For many freelancers, the reason that they choose the lifestyle of being a freelancer boils down to one simple thing: they want to be their own boss. There’s a psychological freedom that comes with freelancing and choosing your own customers.

Cons of Being a Freelancer:

Even though the lifestyle of a freelancer brings about a great sense of freedom for those who embrace it, it’s not without a few downsides.

Higher risk- you put your own money on the line

Being self-employed often means putting your own money on the line to grow your business. Common expenses include ads for customer acquisition, professional-grade equipment, and any 3rd party services that you may depend on to get your work done. You’ve got to spend some money in order to make some money.

Being a freelancer sometimes requires paperwork. Before starting a new project with a client, you’ll likely need to draft a contract to protect yourself legally. There are many different types of contracts you can use, depending on the type of work being performed and the expected deliverables. You’ll need to ether consult with an attorney, or do a lot of research so that you can choose wisely the best contract for the job.

Once you are paid for your freelance services, the work isn’t done yet. You often need to track your expenses so that you can accurately calculate how much of the profit you should set aside for taxes. Having special freelance bank account will simplify and automate those chores.

You have to market yourself to get customers

Even if you have the greatest skills in the world, that’s only half of the challenge of being a freelancer. Now you need to let others know about your skills and services.

The biggest drawback of being a freelancer is that once you open your (virtual) doors for business, you need to figure out how to acquire customers. Your ability to earn money is highly dependent on your ability to market yourself online. There are many methods of self-promotion, but using LinkedIn can be an effective form of free inbound marketing because it allows businesses to discover and contact you.

Is being a freelancer worth it?

While being a freelancer can help you achieve a dreamy lifestyle, it helps to be aware of the extra responsibilities and risks that come long with it.

It’s also important to know that being a freelancer is not the only path to becoming a remote worker. If you are a skilled programmer, designer, or any other kind of digital professional, then you won’t have much of a problem with being either an employee or a freelancer.

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