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Should I Freelance or Become an Employee?

Many job seekers wrestle with the decision between becoming a full-time freelancer or becoming a full-time employee for a company or an organization. If you ask freelancers and employees what the benefits and disadvantages of either situation are, you are likely to receive a wide range of answers, which makes it that much tougher to decide which is the better choice for you. To help in determining, consider the following needs and wants of most job seekers, or in this case, you.

Rate of pay. Employees often get paid a smaller amount compared to freelancers. At most times, freelancers are hired by a company or an organization at a high rate of pay during a busy or difficult time. Full-time employees generally get paid less, which suggests freelancing is the better route. However, freelancers are usually hired for a short period of time. After that, freelancers receive no more work or money from a company or an organization they contracted with. Employees, on the other hand, are usually assured of making a reasonable wage for years. For anyone looking for long-term employment opportunities, freelancing is likely not the best option. For job seekers looking for work with which to get experience, training, or some extra cash for bills, freelancing can prove beneficial as you can freelance only as long as you need the additional funds or have the expertise.

Health insurance. Significant medical expenses are a leading cause of bankruptcy in the United States, with even the most basic of medical care often costing thousands of dollars for one medical procedure. A full or part-time employee with a company will likely receive health insurance and dental coverage, with the employee paying a set amount each month, and their employer to secure the health insurance. Freelancers, on the other hand, generally aren’t eligible for health insurance through a company or an organization they contract with. For job seekers with health insurance through a spouse, medical costs may not be as pressing, so the higher pay rate freelancers usually receive would be a better deal. For those needing insurance, even paying into an employer-backed health insurance plan would save potentially tens of thousands of dollars every year, an amount almost no freelancing paycheck will compensate for.

Leave time. Sick and vacation time is a standard benefit for full-time employees for a company or an organization. Such paid days provide a salary for employees for a set number of days each year, sick time usually something that can be allowed to be built up, a significant financial safety net for if an employee faces a significant injury or illness requiring weeks or months of recovery time. For freelancers, sick and vacation leave is generally not a benefit they have. If they miss a day of work, they lose money. Again, freelancers may make significantly more than a regular company employee in salary, but missing out on paid leave may be a substantial loss.

Retirement benefits. Pensions and 401(k) plans are usually benefits that full-time employees receive, providing funds for after retirement. As for the funds, employees generally pay a portion of their salary to these benefits. Many employers also fund money to pensions and 401(k) plans. For freelancers, retirement plans are typically paid for by the freelancers themselves. So, even with earning a higher amount of money, a freelancer still needs to pay for benefits out-of-pocket while employees usually receive through their employers.

In closing, becoming a freelancer or an employee is a personal choice, largely depending on your life circumstances. Good luck with your decision.

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