A freelancer is an independent professional who is paid for individual tasks or projects. Freelancers have a lot of autonomy.
Freelance work is commonly associated with fields such as journalism, acting, photography, illustrating, music, translation services, and consulting and so on. However, you don’t have to be a freelancer to work these jobs.
See also: Free invoicing software for freelancers
Employee vs. freelancer
The distinction between an employee and a freelancer can be nuanced. Freelancers can actually receive payment either via an employer’s payroll—the same as a regular employee—or they could bill their clients through invoicing.
Classifying something as freelance work hinges on several factors. We’ll go through some of them.
Independence as a freelancer
One of the most important features of a freelancer is their autonomy. Freelancers are self-employed and work independently on a project-to-project basis. They get to select their clients and projects, and they can set their own schedule. This freedom is often one of the main reasons people want to work as a freelancer.
Business structure
Freelancers often set themselves up as sole traders, which is the simplest type of business entity. It means they are the sole owner and are personally responsible for all aspects of the business, including administration and finance.
A freelancer has to complete legal and administrative jobs, like drafting contracts, maintaining records, and ensuring compliance with local business regulations.
They’re responsible for invoicing clients, managing their business expenses, and bookkeeping transactions. If they reach a certain threshold of income, they have to register for consumption tax, and invoice with tax. They also have to report and pay tax to the tax authorities.
Contractual work
The work of a freelancer is usually set out in a contract. The contract should outline the scope of the work, the deadlines, the payment terms, and other project-specific details.
Multiple clients
Unlike traditional employees, freelancers typically work with a variety of clients over time, rather than staying committed to a single employer.
Workspace
Many freelancers work remotely or from a home office. Although some choose to rent space in co-working environments or operate from their clients’ premises.
Safety net as a freelancer
Remember to check what rights you have as a freelancer when it comes to sick leave, holiday leave, insurance, and pension. This will vary from country to country. If the safety nets are not good enough, you can look into arranging retirement savings, set up your own insurance, and set aside money for sick leave and holiday leave.
