Have you noticed the workplace is changing?
Full-time employees are still a valuable asset, but employers are more frequently searching for part-time help. It’s opening up new job opportunities for people that aren’t looking to make a full-time commitment.
The only thing necessary to take advantage of these employment opportunities is to decide how you want to fit in.
Are you a freelancer, independent contractor, or temporary worker? How do you know which label applies to you, and is there a difference? Does it matter if you list one or the other on a job resume? Do employers even pay attention when they are searching for talent?
There is a difference between the three terms, and using the wrong one may affect your chances of getting hired.
Here’s what to know about the terms, so you know which one to list the next time you search for a project and send out resumes.
What Is a Freelancer?
Not sure what a freelancer’s day looks like, how much money they make on average, or even what the job entails? If you are a freelancer, the answers to these questions will apply to you.
What Does a Freelancer Do?
A freelancer is self-employed. They are the boss. A freelancer decides which projects they want to work on and handpicks their clients. There are freelance graphic designers, web developers, and social media managers. Basically, almost any job these days can be done by a freelancer.
They do not work for a specific company, person, or business, but they can take on long-term clients.
Freelancers often have multiple clients at the same time and work on specific projects for each employer. Freelancers can also provide services and work remotely quite often as well.
How Does a Freelancer Make Money?
Freelancers get paid each time a task is completed. How they are paid depends on the arrangement they have with the client.
Most freelancers receive pay through an online service that deposits the funds into their linked bank account.
Setting up and finalizing the pay arrangements before accepting a project is crucial. Most freelancers require clients to send a deposit or place the agreed-upon amount for the completed project in an escrow account.
The money stays there until the freelancer completes the project. It gives freelancers a little peace of mind knowing they will get paid for their work.
What Does a Day in the Life of a Freelancer Look Like?
A day in the life of a freelancer varies. Some freelancers are ready to start work after their first cup of morning coffee. Others prefer a more relaxed schedule. A freelancer only works when they have pending projects, and they can choose which tasks they want to accept.
The day may start with the freelancer looking for projects they want to work on.
Other days, a freelancer may have tasks in their queue waiting for completion. Some projects can take a few hours or days to complete. Others may supply the freelancer with steady work for several months.
How Much Money Does a Freelancer Make?
ZipRecruiter lists the average national salary for freelancers at $32 per hour with an annual salary of around $42,000. The number and type of jobs a freelancer accepts affect how much money they make. Some freelancers earn more, while others bring in less revenue.
How Many Clients Can a Freelancer Have?
A freelancer can have as many clients as they can handle while keeping up the quality of their work. Usually, any or all freelancers involved in any function of Digital Marketing maintain a few long-term clients and work on short-term projects concurrently.
The type of work and amount of time a freelancer is willing to devote to work determines the number of clients.
How Do Taxes Work for a Freelancer?
Freelancers are responsible for paying all applicable taxes that include local, state, and federal. Some online platforms will email the freelancer’s total earnings at the end of the year but will not deduct taxes. It is the freelancer’s responsibility to stay current with their taxes.
Pros of Being a Freelancer
- You have the freedom to choose your jobs.
- You can work when you want.
- You are the boss.
- There is almost unlimited earning potential from multiple clients.
Cons of Being a Freelancer
- You are responsible for keeping track of your taxes.
- There is competition for the best-paying clients.
- You may have to submit a resume every time you apply for a new task.
Tips for Being a Successful Freelancer
- Accept all small jobs when you are starting as a freelancer. It will help build your online profile and your customer base.
- Never turn in work late.
- Be available to clients throughout the project.
- Be willing to accept changes to the project
What Is an Independent Contractor?
Not sure what an independent contractor does. Here’s everything you need to know.
What Does an Independent Contractor Do?
An independent contractor can perform many of the same tasks as a freelancer, but there is a difference. Independent contractors have a contract with their clients. The contract specifies the job and its requirements, along with the pay rate.
Failing to honor the contract can bring legal consequences for either the independent contractor or employee.
How Does an Independent Contractor Make Money?
An independent contractor makes money when the contract finishes. Some contracts may come with milestones.
Once the independent contractor reaches the milestone, a percentage of the total payment is released.
Payments can also be held in an escrow account and released when the job is done. An independent contractor has some input into how and when they receive compensation, but the final decision is up to the employer.
What Does a Day in the Life of an Independent Contractor Look Like?
The contract terms determine how an independent contractor’s day looks like, along with the type of project.
Some independent contractors follow the same schedule as salaried employees, while others have a little more latitude.
When contractors are in-between gigs, their day usually starts searching for prospective employers. The day may also include interviews and negotiating contracts. Once they accept the contract, their day will follow the agreed-upon terms.
How Much Money Does an Independent Contractor Make?
According to ZipRecruiter, an individual contractor can easily make over $3,000 per month or more than $40,000 annually. The pay rate varies by state and usually depends on the average cost of living.
The type of project also affects how much independent contractors make, along with the time limit set for the task.
Longer projects usually pay more. Your pay rate may also vary when you work with international clients.
How Many Clients Can an Independent Contractor Have?
Independent contractors usually have one client at a time. The tasks are often more time-consuming and require attention to detail.
It is possible to have multiple clients simultaneously, but it usually only applies to contractors working on part-time projects.
When independent contracts have multiple clients, managing their schedules is crucial. It’s easy to fall behind on tasks that will make the contract null and void. A good tip to remember is to keep the work week to an average of 40 to 60 hours. Anything more can quickly become overwhelming.
How Do Taxes Work for an Independent Contractor?
You are responsible for paying your taxes at the local, state, and federal levels. You will receive a W-2 from your employers at the end of the year. If you made over $400 from any client, you need to file a 1040 form with the IRS.
You can claim some deductions, like equipment, travel time, and expenses if it is related to your independent contracting work.
Some independent contractors automatically deduct taxes from each payment to ensure they are ready when it’s time to file. You can find the tax rate for your city, county, and state on government websites. The federal government also has a website where you can check your tax rate.
It’s also possible to pay your taxes as you go. The advantage is you don’t have to worry about a hefty bill when taxes are due.
Tax rates might be different for international contracts. It’s something you want to look into before filing your annual taxes.
Pros of Being an Independent Contractor
- You can pick and choose your employers.
- You can leave after the contracted project is finished.
- It is easier to negotiate your wages.
Cons of Being an Independent Contractor
- The work is usually short-term.
- You are responsible for keeping track of your taxes.
- Clients can void the contract before the project ends.
Tips for Being a Successful Independent Contractor
- Create a business plan and ensure your contracts are in order.
- Market your business on multiple platforms.
- Be professional at all times when dealing with clients.
What Is a Temp?
Are you thinking about becoming a temp? Here’s what you need to know about being a temporary employee.
What Does a Temp Do?
A temp is a temporary worker that fills in when a permanent employee is out on leave. They may also fill a short-term position. Temporary work can be remote or in-person. It depends on the employer and the type of job.
How Does a Temp Make Money?
A temporary worker usually receives payment the same way as a permanent employee. It can be a weekly, bi-weekly, or monthly check. The type of work usually determines when a temp gets paid.
Temps are often paid an entry-level wage and do not receive the same benefits as full-time staff. Not all temps make the same amount as full-time employees.
Large, short-term projects may pay a higher rate. It depends on the project and the employer.
What Does a Day in the Life of a Temp Look Like?
A temp typically keeps the same hours as a regular employee. It can be eight-hour days, with the legally scheduled breaks. Temps usually do not have the freedom freelancers have when it comes to setting their schedules.
Their day is based on the demands of their temporary jobs.
A temp’s day may also involve searching for their next full-time job. Referrals from previous clients can result in new clients, but most temps find their jobs through applications or a service specializing in short-term work.
How Much Money Does a Temp Make?
How much money a temp makes depends on the job. On average, ZipRecruiter reports an hourly rate of $18 and an annual salary of around $37,406. Some temps can earn over $60,000 per year. It depends on the type of work.
Temps can also work for international clients, and this can affect pay rates.
Some clients will require travel, and these expenses are either included in the salary or automatically covered by the employer.
How Many Clients Can a Temp Have?
A temp only has one client at a time unless it is a part-time job. Some can handle two clients, but it is rarely a good idea.
A temp is an employee at a company expected to perform efficiently and professionally. It includes being prompt and ready to perform their duties.
How Do Taxes Work for a Temp?
Some temps are responsible for keeping track of their taxes, while others have it deducted from their paychecks. If you are with a company for a few months, chances are your taxes are being deducted, and you only need to file a 1040 form to see if you owe or are getting a refund.
If your employer does not deduct taxes, it’s your responsibility, especially with international clients.
You may have to pay taxes in the country you live in and where you are employed. It’s always a good idea to ask your short-term employer about taxes before agreeing to the position.
Pros of Being a Temp
- You have the freedom to switch jobs once the contract ends.
- Taxes are often deducted from your wages.
- You often have a set work schedule.
- Payment is often weekly or biweekly.
Cons of Being a Temp
- You do not have job security.
- The pay rate is often less than full-time employees.
- You are constantly searching for the next job.
Tips for Being a Successful Temp
- Be professional at all times.
- Be flexible with your work schedule and the tasks you are willing to perform.
- Engage with your co-workers and learn as much as possible about the job.
- Be willing to learn from experienced co-workers. It is often valuable information you can use to land your next job.
The workplace is changing, and more employers are looking for alternative hires like freelancers, independent contractors, temporary workers. You’ll find several similarities between the three types of employees, along with multiple differences.
All three can have international and local clients. Their pay rates are usually set according to the job type and length. Work can be made easier for all three by using a CRM specifically made for solopreneurs to handle different clients, projects, and undertakings.
They are also generally responsible for taxes, and having a professional attitude is key to landing the job.
Freelancers have more freedom in the work they choose and their scheduling. Independent contractors have a little more flexibility in negotiating their pay rate and are protected by signed contracts.
Temps are short-term employees subject to the same rules and regulations as full-time workers. They are also more likely to get paid regularly during the job.