Freelance vs. Self-Employed Work: What's the Difference?

By Indeed Editorial Team

Updated January 19, 2023

Published July 26, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

In recent times, conventional modes of employment have been fast-changing, giving room for other forms of employment. That is why it is not uncommon for forms or applications for jobs to ask if you're a freelancer or self-employed. While both job descriptions are similar, it is important to know that they come with different responsibilities, work hours and benefits. In this article, we explore the differences between freelancing and self-employment and how to determine the best fit for you.

What is a freelancer?

A freelancer is a self-employed person who delivers goods and services to various organizations and businesses. Freelancers usually work on a short-term contract basis, though they may also work on a long-term basis. Freelance professionals work for or with these companies, offering their services and labour for a charge. These experts typically work for multiple clients and on numerous projects at once, depending on what their schedule would permit.

Related: A Beginner's Guide To Freelance Jobs

What is a self-employed person?

A self-employed person is a professional who earns money from an independent economic activity instead of working for an employer, such as an organization or another individual. Self-employed professionals have control over the number of hours they work, their job description and how they decide to complete their tasks. Self-employed workers include entrepreneurs, company owners and startup CEOs.

Related: Differences Between Being Employed vs. Self-Employed

Similarities between freelancers and self-employed workers

Both job categories have some similarities and could easily be mistaken for the other at first glance. Here are some of the major similarities freelance and self-employed workers share:

Independence

Unlike regular employees, freelancers and self-employed individuals have more independence. They're able to make decisions regarding their work, who to work with and their designated work schedules. Self-employed individuals and freelancers, to some extent, have some degree of control over their work. Both get to choose when and how they want to work.

A freelance creative writer, for example, has control over the words they decide to use and the order in which they use them, and a self-employed person has complete control over how they handle the logistics of their business. Regular employees do not have this kind of autonomy because their managers assign tasks to them, and they're meant to complete these tasks in the way their employers instruct them.

Taxes

Freelancers and self-employed professionals both need to file taxes the same way. As taxpayers, when tax season arrives, both freelancers and self-employed individuals can complete Form T2125. This form is a statement of business activities, including expenses and income.

Related: What Is a Statement of Operations? (With Types and Example)

Creative freedom

Freelancers and self-employed individuals have the creative freedom that allows them to express themselves through their work. The self-employed worker has authority over the type of business that their brand operates. The freelancer can select which clients they wish to work with and the kinds of projects they want to do.

Related:

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  • 10 Key Entrepreneurial Skills You Need To Start a Business

Differences between freelancing and self-employment

Even though they can be similar, freelance and self-employment have their distinct differences. Here are some of the key differences you should know if you're considering either of these forms of employment:

Freelancers frequently work alone compared to self-employed professionals

Professionals who identify as freelancers generally work alone. However, self-employed professionals are more likely to employ others to assist them and ensure the smooth operation of their businesses. It isn't because freelancers don't have the financial means to hire help, but rather because self-employed people are typically entrepreneurs.

Though freelancers provide a variety of services to various clients, self-employed individuals concentrate their efforts on creating a firm or brand. So, larger enterprises or those looking to expand tend to need the assistance of others.

Related: Different Pros and Cons of Working from Home By Yourself

Self-employed professionals focus more on growing their organization

Self-employed people mostly own organizations with an operational structure. They also have a brand that they try to build and market. Self-employed people focus on fostering favourable professional relationships with clients and their employees. They want their brand to scale and achieve their set goals. Freelancers, however, focus mainly on providing their services to a variety of clients.

Additionally, freelancers frequently complete temporary work. Self-employed individuals are more entrepreneurial and focus on establishing enterprises and startups. They usually seek investors, grants, and other opportunities or strategies to grow their business.

Related: What Is Self-Employment? Definition and Common Types

Level of control

Although both freelancers and self-employed individuals enjoy some form of independence or autonomy, the level at which they operate or the extent of control they have is different. A freelancer has some control over what clients they decide to work with, though they provide services to their clients in the way the client wants. Once they accept a job from a client, they complete the job how the client wants it and in the client's desired timeframe.

Self-employed individuals have a bit more control in this aspect. They have more creative freedom when it comes to the services they offer and how they offer them. So, though they both have some level of control, the amount of that control differs.

Related: The Top 20 Best Self-Employed Jobs With Added Salaries

Work commitment and relationships

Self-employed professionals dedicate themselves totally to their business and the consumers who buy their products or service. The main goal for self-employed people is to grow their business or brand. They do this by fostering favourable professional and customer relationships. Freelancers typically hold temporary jobs, so they may commit to shorter relationships with clients than self-employed professionals.

Related: Customer Service Skills: Definition and Examples

Work schedule flexibility

As a freelancer, you can have a flexible work schedule. Though there are deadlines for freelance work, the work schedule largely depends on the freelancer. As a self-employed individual, though you may have a great level of flexibility, you may have less choice in your work schedule. For instance, if your business has a physical office, you may need to have specific opening and closing hours.

Related: What Is Flexibility at Work? (With Examples and Benefits)

Selecting a work location

When working as a company employee, the company decides your work location, which could be the office or another site. However, working as a freelancer can give you the opportunity to choose where you want to work. You could set up in a small office space and usually have the option of working remotely or from home. If you're self-employed, your work location largely depends on the nature of your business. If it is a business that requires you to have a fixed, recognized physical office, then you may have fewer options when it comes to location flexibility.

Benefits of being freelance or self-employed

Being either a freelancer or self-employed comes with some great benefits. Here are a few of these advantages:

You have control

As a freelancer or self-employed professional, you don't have to report to a superior. You can make decisions regarding your work, your company's structure and the products and services you provide as a self-employed individual. When you work for yourself, you no longer have a manager directing your every action. You have complete control over how you complete your job. Your customer may influence the final result, but that is the extent of their influence. It is entirely your choice how you complete your work for a client as a self-employed or freelance professional.

You can earn more

Freelancers or self-employed individuals may earn more than the average employee because they work with clients directly. As a result, they don't have to remit a percentage of the money to anyone else. It's entirely up to the freelancer or self-employed individual how they allocate their funds and income.

You can have sick days or work from home

When you're a freelancer or self-employed, you can take a sick day whenever you need. You don't have to worry that your employer won't approve your absence from work. Also, working remotely or from home is a possibility, which allows for a great work-life balance.

Related: Everything You Should Know About Working From Home

You can work with your preferred schedule

You can have schedules tailored to your individual needs when you're a freelancer or self-employed. You can create a healthy and favourable work-life balance. Most freelancers work remotely, and even if you have a workspace, you're still able to craft a schedule that offers flexibility. This flexibility also applies to self-employed individuals. You can always change your work schedule to ensure that it's comfortable.

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