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Freelancer vs. Employee: Which Is the Better Choice for Me?

Dec 7, 2020
(updated: Dec 2, 2022)
Max 5 min read

Another Zoom meeting that could've been an email. You're daydreaming about working on your own terms as a freelancer—your own schedule, your own clients, flexibility, independence. Doesn't it sound nice?

Or maybe you are a freelancer. But the month was rough. You haven't had a steady flow of client work in a while, and the idea of a stable paycheck gets more enticing by the day. Not to mention employer health insurance and a 401k.

Ultimately, both options come with their own sets of pros and cons, making neither a definitive “better” choice than the other. That decision comes down to weighing both career choices and using the information in front of you to make the best personal choice.

The Pros and Cons of Freelancing

Freelancing is appealing because of the flexibility and the freedom to build your own schedule and work remotely. Many of us have also seen the glamorous lives of digital nomads on social media—those who travel the world and use their income from freelancing to pay for it. But those influencers don't always dive into the tough parts of the freelancer vs employee debate. Let's walk through all of it.

freelancing space

Freelancing Pros

Managing Your Own Business

You're a business owner! New freelancers don't always realize that freelancing—whether you're a graphic designer, programmer, writer, or something else—means that you're also managing a full-fledged business. You craft your brand, build client relationships, set your business hours, and manage your income and expenses. Building a business from the ground up is one of the most exciting parts of being a freelancer.

Working from Home

There's no dingy office for you to drive to every morning. You get to work from home! Or from a coffee shop. Or from a park. Or from another country. In the gig economy, you can work from anywhere you want—from the largest city to the most remote mountaintop village (so long as you have an internet connection). The possibilities are truly endless!


One of the biggest perks of being a freelancer is flexibility. Do you need to take a day off to take care of your kids? Or run errands? Or simply because you want to?

Being a freelancer means that you're your own boss, and you can build the schedule that works best for you—tweaking it as you go. The flexibility doesn't end there. Instead of seeing the same faces each day in the office, you get to work with people from all over the world!

Set Your Own Rates

As a freelancer, you can often earn more than you would be working under traditional employment status. You can set your rates and raise them over time as you gain more experience, not just whenever your boss decides to increase your salary.

Not only that, with the freedom of taking on as many clients as you can handle, your yearly income can skyrocket over those who work the same job as a full-time employee.

Choose Your Projects

You have the option to stick with the same kinds of projects or mix them up whenever you please. This prevents the kind of boredom that people can experience as a traditional employee. When you freelance, you can seek out the projects you want and mix them up to keep your work feeling fresh and exciting.

Freelancing Cons

Managing Your Own Business

Wait, isn't this a pro? Yes. But managing your own business is a double-edged sword. Learning the ins and outs of being a business owner is the most difficult part of being a full-time freelancer.

Aside from all the cool stuff, there's a bucket of uncool stuff that comes with it—tracking your finances to pay income taxes, seeking new clients, buying your own office supplies, purchasing insurance, and planning your retirement without aid from a company. All of these things are manageable, but they each require a learning curve and resilience when times get tough.  


You don't typically have a consistent income as a freelancer. Clients can discontinue working with you. And obtaining new ones isn't always easy. This means that while some months might be great, others can be difficult. Having a level of comfort with uncertainty and instability is an important trait for any freelancer.


While freelancing means you have flexible hours, how you spend those hours can get pretty lonely. Going to work every day means you have coworkers to talk to, people to see, and team activities to enjoy. When you work alone, you don't have these things, and you must come up with ways to combat the feeling of loneliness that drift into your home office every so often.

This means having to remember to go outside, schedule time with friends, and recharge so that you'll be ready to tackle the next day.

Self-Employment Tax

On paper, self-employed people do pay higher taxes. As a freelancer, you'll have to pay self-employment tax while W-2 employees split this rate with their employers. In the eyes of the IRS, a freelancer is both the employer and the employee.

Though, you can combat this tax by deducting home office space, business expenses, and a variety of other deductible items. Still, the higher tax is something you'll definitely need to consider as it can be a shock if you're used to employment.

No Unemployment Insurance

Along with the added tax, you won't be able to collect unemployment insurance if you're having a rainy month. You're in complete financial control, which is great when things are going well but not so much if you lose more than one client for the month.

freelance vs self-employed

The Pros and Cons of Being a Full-Time Employee

Employee benefits are a bit more well-known, but I'll go through the ones I think are most important in order to paint a clear picture for the purpose of comparing and contrasting.

Full-Time Employment Pros

Employer Benefits

Employers take care of their full-time employees—health insurance, taxes, paid vacation—and depending on the quality of the company, that list might go on and on. Having a company to lean on for these things is perhaps the biggest pro of being a full-time employee vs. being a freelancer.

Job Security

Working freelance means that you might not always know when you'll land a new client. Employees don't have these concerns because the work is always there. A consistent paycheck is always there. Consistency and security are massive pros for people with full-time jobs.


If you don't like being around people too much, then consider this one pro for the freelancer. But if you do, then one great thing about going to work is having people around you. Throughout the day, you communicate with your co-workers, collaborate on projects, and even go to lunches together. This can make work more fun, and it's one thing that many people miss after going freelance.

Career Growth

Being a full-time employee has a much more traditional path for career growth. Because of this, you can hop right into a company, work hard, and have a generalized idea of what your future will look like.

Full-Time Employment Cons

Lack of Flexibility

I love being a freelance writer because I work when I want to. Full-time employees don't have this luxury. Employees typically work 9-5 and report to their boss when their boss demands it. This lack of flexibility can add to the stresses of life in the office.

Office Politics

Workplace culture varies from company to company, but one thing that is always present—even if it's only to a small extent—is office politics. Navigating how to act around certain people, building the right relationships to get that promotion, and other elements of workplace culture can be exhausting and typically don't feel rewarding. Part-time employees, full-time employees, and even independent contractors navigate these waters when being part of a company.


Working full-time is a great safety net for all the reasons listed in the pros section. But it's easy to get comfortable in a full-time position and find little room for growth. Your salary is fixed until the boss or manager gives you a raise, while a freelancer's earnings can go up month to month.

On the contrary, freelancers strive for growth because it's a key element of owning a business. Employees might not always have that same growth mindset while working for a corporation.

Balancing Family Life

After the COVID-19 pandemic, many people got a taste of the freelancing life and the advantages of working from home. At the top of the list, people pointed out how much more time they had with their family. When you work a traditional 9-5 job, you're away from family for an extended period of time each day. Not only that but many days are spent working late at the office finishing up projects to meet quickly approaching deadlines.

You Can't Choose Your Projects

There's a risk of experiencing boredom in your job when you can't choose your projects. This is one of the main reasons people aren't satisfied in their current roles. If you perform the same duties each day, you can quickly lose interest in your job.

CV Lacks Versatility

If you're employed, you tend to stay at a company and try to climb the employment ladder. And while, for many decades this was a good thing, in this day in age many employees are being let go. Does your CV showcase your versatility?

As a freelancer, you work with a variety of clients on a variety of projects using a variety of skills. Because of the diversity of experience, your CV can give a more accurate reflection of your capabilities in a short amount of time. Also, it's a lot easier to put new skills to use because you can seek out new clients to work with.

Making a Decision

When you wade into the freelance vs employee debate, try to remember that living a wonderful life is possible for both freelancers and full-time employees. Choosing between the two comes down to weighing the pros and cons and determining what fits your dream lifestyle the best.

If you're currently a full-time employee and thinking about going freelance, I highly recommend looking for part-time side gigs and term projects on the side before diving in full throttle. This will give you a realistic taste of what freelancing is like without jeopardizing the stability you have with your current employer.

And if you're thinking about making the jump to freelancing, sign up with Indy for free to make managing your freelance business easier than ever.

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