Self Employed

Posted in Human Resource Terms, Total Reads: 234
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Definition: Self Employed

Self-employed is when a person works for themselves instead of an employer who pays them for them salary or wages.

 

Self-employment may be of the following types:

• Freelancing

• Business or entrepreneurship

• Practicing a trade such as medicine, law etc.

• People working on commission, e.g. sales person

• Producing their material, e.g. farmers, fishermen, potters, artists etc.

 

In case of a business a self-employed entity owns and operated the day-to-day functioning of the business.

 

Tax authorities will consider one to be self-employed if:

• They make themselves known as such

• Income generated by them is requires to be filed for tax under the relevant jurisdiction

 

Advantages of Self-Employment are:

• Independence: The process and schedule of work is set by the individual themselves. This reduces work related stress and the job is enjoyed more.

• Financial gain: Unlike traditional employees who may or may not gain from the profit made by the company, a self-employed individual gains the full financial reward for the work that they do.

• No one else takes the credit: Any ideas incepted by one remains as their own. In case of traditional workplace where credit is usually taken by the higher authorities or gets divided among the team.

 

Disadvantages of Self-Employment are:

• Higher risk factor: Success or failure depends completely upon the market situation and the effort one puts in. There can also be times without work and income.

• Lack of benefits: There are certain benefits provided by organizations to its employees traditionally, like vacations, pension, etc. In case of self-employment these will be have to be paid out of one’s own pocket.

• Lack of personal time: To have a successful career as a self-employed individual it is important to put in hard work and extra efforts. This can take a toll on the personal relationships as well as can leave on without any time for themselves

• Stress: The hard work and long times leaves hardly any time for relaxation or vacations. This can lead to stress and even burnout

 

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