Employee vs. Freelancer: What’s the Difference?

If you’ve only ever been an employee or a freelancer, it can be difficult to imagine how the other half lives and decide whether the grass really is greener on the other side. Of course, there are many differences between being an employee and a freelancer, but we can broadly categorise them to get a clearer idea of the differences between employed life and freelance life.

As an employee:

When you’re an employee, your employer is responsible for many things…

Money:

  • Salary: They pay you an agreed salary on the basis that you meet a contract of employment, company policies and procedures, and processes.
  • Leave: If you want to take time off, they have to approve it first, but they often pay you sick pay, holiday pay, maternity, paternity, bereavement, and so on.
  • Benefits: Sometimes they pay your pension, healthcare, and other benefits such as cycle to work schemes, childcare vouchers, and bonuses. Sometimes they don’t.
  • Security: The length of your contract is usually known in advance, be it permanent or temporary, and you usually have the security of knowing that as long as you meet the employer’s requirements, your job will be secure.

Work:

  • Hours: They choose the hours you work, perhaps with a small amount of flexibility.
  • Tasks: They generally decide which work, tasks, and duties you do—and sometimes they choose the way you do that work.
  • Decisions: While you make decisions in your role, there is often someone making decisions on a higher level that may affect you.
  • Goals: Generally, they set the goals for you to achieve in your role. Often, you get to set goals too via an appraisal, but you have to meet the employer’s requirements.
  • Training: Your employer will often provide training, whether it’s industry updates or new skills.

Working environment:

  • Location: Often, they choose where you work and what the working environment is like, perhaps allowing you to work from home sometimes.
  • Clothes: Often, they tell you what you can wear, be it a specific uniform or an office dress code.
  • Colleagues: You don’t get to choose your colleagues, but some become friends. You can generally find a support network through teammates, your boss, or other employees.

In summary, the employer has the control in the relationship. They decide the majority of factors. While you do get input into these factors, the emphasis is on you to meet the employer’s requirements to keep your job. If you fail to meet their requirements, they may decide to terminate your employment.

As a freelancer:

When you’re a freelancer, you’re responsible for everything

Money:

  • Salary: You earn an income by working with a range of clients and finding work yourself, delivering work to clients that meets their expectations. As a result, your income is often unstable and unpredictable.
  • Leave: You can take time off when you want to, but only if you can afford to. You have to earn enough to cover illness, emergencies, and holiday.
  • Benefits: If you want a pension, healthcare, or other benefits, then you have to pay for them. Not to mention insurance, income protection, and everything else.
  • Security: You can’t know how secure your job is, as you may lose clients or fail to find clients.

Work:

  • Hours: You choose the hours you work based on your workload, body clock, and social life. This means you have to ensure you have a good work-life balance.
  • Tasks: You decide which work, tasks, and duties you do—and the way you do it. You decide the company policies, procedures, and processes.
  • Decisions: You make all of the decisions and solve all of the problems.
  • Goals: You set the goals for you to achieve, or you don’t.
  • Training: If you want training, you have to find and pay for it yourself. The risk of not doing so is stagnation, failing to keep up to date, and getting left behind.

Working environment:

  • Location: You choose where you work and what the working environment is like, which may be working from home, a coffee shop, a co-working space, or travelling.
  • Clothes: You decide what you wear, which may be your pyjamas.
  • Colleagues: Unless you count your pets, you have no colleagues, which can become lonely and isolating if you’re not careful. You have to find your own support network, be it friends, family, or other freelancers.

In summary, you have the control. You decide the majority of factors, but this comes with a high level of risk because your income and future is often uncertain. As you’re the only person, you end up wearing multiple hats to do everything that needs to be done.

Employee vs. freelancer: who wins?

The winner here depends on which type of work suits your lifestyle and personality, and whether security or freedom is a bigger priority to you. For me, the freedom that freelancing offers is worth the risks and uncertainty, but the freelance lifestyle certainly isn’t for everybody. These factors should give you a good idea of which lifestyle is right for you.

So, who wins? You decide.

Stay tuned for more tips and insights on A Freelance Life every week!

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