I love the freelance way of life and the freedom that comes with it. However, there are some disadvantages to saying goodbye to your status as an “employee”.
In this article, I will talk to you about freelancing pros and cons based on the lessons I have learnt in these 6 years working on my own. Read on for details!
My quest for a better way to work.
If you find yourself googling “work from home ideas” hoping to finally figure out how to ditch the cubicle, I can totally relate. I was in the same position a few years ago. I knew that it was time to change the way I worked but had no idea how to replace my full-time salary.
My journey to self-employment started with a burning desire to change my routine. I wanted to ditch the daily train commute, trash the alarm clock, and have the freedom to go to the beach in the middle of the day without asking for permission.
I knew that there had to be a smarter way to work, but I didn’t know back then how to make money without being paid a salary.
Finding myself in this predicament I did what most of us do in times of crisis: I turned to Google. This is how I learnt about the world of freelancing.
What is freelancing?
Freelancers offer their professional services to companies on a flexible basis. So rather than being hired as an employee for one business, freelancers work on casual terms with a range of clients.
Freelancers can work on a variety of projects, which can be one-off, short term, long term projects. It is up to them to negotiate the terms of each project with the client.
What makes freelancing attractive, is that it gives you more freedom. Freelancers have control over their schedule and can decide the hours of work, when to work, and where to work from. This means that if you are looking for more work-life balance, freelancing is a great option.
As long as you meet your agreed deadlines, you can go on holidays whenever you want without asking for permission. Or if you wake up in the morning and feel like taking the day off to go to the beach, you can!
Freelancers can also set their rates, and have the flexibility to accept or reject projects as they wish.
How do freelancers get paid?
Freelancers need to invoice for their services. If you are working with clients in New Zealand, you would need to send them an invoice and they can pay you directly into a bank account.
Once you get started as a freelancer it is a good idea to open a bank account that is separate from your personal account to keep things tidy from an accounting point of view (more tips here)
The beauty of freelancing is that you are not limited to working with NZ clients only. You can work with overseas clients and get paid into your New Zealand bank account via Transferwise or Paypal.
Less protection under the law
On the flip side, freelancers are not covered by most employment-related laws in New Zealand. This means that you will miss out on things such as paid holiday leave, sick leave, or even minimum wage entitlements. Public holidays are also a thing of the past when you start freelancing, so you can wave goodbye to that paid long weekend.
The good news for New Zealand freelancers compared to those based in other countries is that we can still apply for paid parental leave via the IRD, and we are covered by the ACC in case of an accident. Go New Zealand!
Are you a freelancer or an employee?
Sometimes the line between freelancer and employee can get blurred. If you are going to start freelancing, it is a good idea to get familiar with what you are entitled and not entitled to under the law.
Rules and regulations will change from country to country, but here’s an official resource you can check if you are based in New Zealand.
What are the pros and cons of freelancing?
In this section, I will cover the pros and cons of working as a freelancer. While the positives hugely outweigh the negatives from my point of view, I must admit that freelancing is not for everyone.
Freelancing pros and cons at a glance:
What are the positives of freelancing?
You can work from anywhere: whether you work from home, the beach, or a cafe, the choice is yours.
You can set your schedule: sleep in or work early in the morning. You can decide how to organise your day (and week, and month, and year!)
You can choose your projects: you can accept or reject offers as you wish. You can build a schedule working on a variety of projects and only choose those that add value to you in some way.
You can choose your clients: forget about having to put up with colleagues that make your life miserable. You can decide who to work with and surround yourself with people who you truly like.
You can set your rates: you can decide how much to charge and work only with clients that are prepared to pay what you are worth.
You can take time off when you want: if you wake up in the morning and decide that you want to take a day off, then you don’t have to work (as long as you still meet your deadlines, of course) When it is time to take a holiday, you don’t need to ask for permission, you can just pack and go. Plus you are not confined to your 4 weeks annual leave – you can go for as long as you want!
You can claim expenses: when you work as a freelancer you can claim business expenses. If you work from home, you could claim for a portion of your household bills such as power and Wi-Fi. Talk to an accountant to make the most of your tax deductions.
You call the shots: