18 Freelance Pros and Cons | Freelance vs Employee in 2024

If you’re new to freelancing, you may not know all the differences between a freelancer and an employee–freelancing has its distinct advantages, but also disadvantages. As the industry continues to grow and more companies rely on contract work, freelancing will only become more popular. Today, we’ll discuss 18 different freelance pros and cons and how they compare to employees. First, let’s put out some caveats, as this guide is by no means a catch-all for every scenario. While we will cover the most important distinctions freelancing, it’s important to remember:

Advantages and disadvantages of freelancing can depend largely on the type of work you do, what industry you operate in, and even the specific client you are working with
Expect more volatility and uncertainty overall in the freelance environment. When it comes to salaries and pay, freelance rates can be heavily dependent on location
Since our knowledge primarily focuses on US freelancers, expect our list to apply the best for US freelancers and employees. Generally speaking though, our tips and best practice should apply regardless of region

1) You have ultimate control over your schedule and ability to work

Unlike employees, freelancers generally have a lot more freedom to choose when they want to work, and even where. Employees often have to adhere to a strict 9-5 schedule and may have to report to the office, but freelancers generally are evaluated solely based on the completion and quality of their work.

2) Freelancers have higher earning potential

Despite what society may tell you, that full-time corporate jobs are cushy and have a lot of room for growth, freelancing actually has more potential.

As an employee, you have to face countless obstacles that you can’t control–like your ability to network, workplace biases, role openings, etc. before advancing in your career.

As a freelancer, you have total control over how many clients you want to take on, what to charge for your rates, when to increase your rates, how to improve your portfolio, etc. Nobody can hold you back. It’s important to note that while there’s higher potential, it doesn’t mean everyone will earn more freelancing. It definitely requires grit, hard work, and the ability to market yourself.

3) Freelancing does not limit your creativity

In a traditional job, you’re relatively limited to what your manager or organization wants you to do. There’s already an established work flow and preferred method of working amongst teams and individuals. However, freelancers are not bound by any standards other than those you set for yourself. If you consider yourself a freelance artist, or are working in a more creative field like design, or UI/UX, freelancing offers much more creative freedom than traditional jobs. In fact, you usually get hired specifically for your style and knack of creativity.

4) Freelancing gives you more control over the type of work and clients you take on

In addition to having control over your schedule, you also have the final say for what type of work to take on. If a project seems too boring or creatively lacking, you can choose not to work on it. If a particular client is exhibiting some red flags and you dread working with someone like that, you have the option to say no. Ultimately, unlike a W2 worker, you have complete control over what you work, and who you work with.

5) Freelancers have more freedom to build their resume and showcase specific skills

Because freelancers have control over their work and partners, you have the option to build your resume more specifically. Outside of resume building, freelancers can pick and choose what kind of skills they'd like to bolster in preparation for a pivot in their career, or just general interest change.

6) Being a business owner gives you a strong sense of pride and fulfillment

There is nothing more fulfilling than being a sole proprietor and working for yourself, being proud of what you've built. As a freelancer, all work that you do is to further your own portfolio, career, and earning potential. No one can take that away from you and every piece of work you complete, only adds to your skill set and profile. As a result, freelancers tend to be more skilled and are extremely proud of their work, because it is a direct reflection of themselves. In contrast, employees often don't have much choice in what they work on and often, the work doesn't directly contribute and benefit their careers necessarily.

7) Freelancers don't have a boss—you are your own boss

Going hand in hand with having control, you also don't have anyone you need to report to as a freelancer. Everything that you do, is for yourself. Generally, no one can dictate how you work, or when you work. Sure, there may be project guidelines and client preferences, but ultimately you can decide if you want to take on that project and stay within strict guidelines, or simply walk away.

8) Freelancers can end up saving on taxes

Because you're considered a "business owner" when freelancing, there are many ways that freelancers can lower their taxable income, when compared to traditional employees. For example, anything you purchase in order to support your freelancing business can generally be considered a write-off, or expense, which lowers how much you owe in taxes. Here are just a few common things that you can spend money on which directly lowers your income and subsequently, taxes:

Computer software
Internet and utilities
Office rent, or portion of home rent for office
Supplies
Office equipment, like desks or chairs
Traveling to meet clients

9) Freelancing teaches you prudent business skills outside of just what's required of your role

As a freelancer and business owner, you will be exposed to certain soft skills and technical skills that employees typically don't gain exposure too. For example, you have to learn how use and manage invoicing software to ensure you get paid and keep clients happy. At the same time, you need strong communication skills to maintain a strong relationship with clients and meet their deliverables. Similarly, because you own your practice, it's entirely up to you to grow your business and freelancing career--which forces you to learn how to manage, maintain, and grow a business developing sales, marketing, and even management experience if you bring on subcontractors. Lastly, freelancing taxes can be complicated and multifaceted--you will gain valuable experience in filing taxes, managing expenses and develop general bookkeeping skills.

1) Freelancing can be difficult and overwhelming

Unlike being an employee, being a freelancer means you have total control over your practice and the growth of your business. If you're unable to handle all the responsibilities and pressure, freelancing can quickly become overwhelming.

2) Freelancers walk a lonely road

As a freelancer, it's harder to find peers or mentors in your environment. Unlike employees, you're usually not part of a team or department so it can be harder to develop any sort of camaraderie with people you work with. In fact, many times you don't really have people you are working with, other than clients. Similarly, because you don't have a manager, it can be difficult to find someone you can trust and take mentorship from.

3) Self employment taxes for freelancers can be complicated

Due to the "business owner" nature of freelancing, there are many tax implications that would not apply if you were an employee. If you're confused about taxes or shy away from complicated legalese, freelance taxes can quickly become overly complicated as a freelancer. To get a good handle on your taxes, you need to understand:

Self employment taxes
Estimated quarterly taxes
Maximizing your write-offs and expenses
Federal and state level taxes
Filing additional tax forms than your standard 1040 and W2

4) Freelancers need to be able to market themselves

If you don't like the idea of needing to market your own abilities to clients, then freelancing may be more difficult. Because you don't work for a team or manager, work isn't delegated to you. Instead, your income is entirely dependent on your ability to win clients. Since applying for and interviewing for gigs can be competitive, it's very important that your portfolio and profiles are set up professionally and you're able to convey a sense of professionalism and effective communication to potential clients.

5) Freelancers don't get benefits usually

If you like the idea of having paid time off and subsidized health insurance, then freelancing may not be for you. As a freelancer, not only are you responsible for growing your own business, you're also largely responsible for personal aspects as well. That means that if you take time off and don't do any work, you aren't getting paid for that time. Similarly, you'll have to shop for your own health insurance plan, instead of just signing up for the one that's available through work. Generally, that means you'll have to pay much higher premiums and your actual plan may not be as good.

6) Freelancing can be volatile and unpredictable

You don't have set hours, locations or even guaranteed income. That means that as a freelancer, it's possible that you have some great months for income and projects, and some poor months where you make no money. It's entirely possible that you aren't able to predict how much you may make each year, and your potential is entirely dependent on yourself. For some, this may create a lot of stress and too much uncertainty. For others, the uncapped potential is where they thrive.

7) Freelancers don't always get paid quickly, or at all

It's entirely possible as a freelancer that clients ghost you and don't pay. While that's generally rare if you vet your clients, it's still much more likely for you to not receive payment for work. This is why we recommend legit platforms like Upwork where much of the vetting and even automatic payment is set up for you. At the same time, even if a client eventually does pay, you may be required to chase them down and constantly remind them to pay. For example, I have a client that's consistently a month late on her payments and I have to constantly remember to remind her to pay--this can be incredibly annoying for some to manage.

8) Freelancers may find it hard to stay motivated

In slow months, freelancers may find it hard to stay motivated and wonder if it's worth pursuing at all. It doesn't help that you are the only person you can rely on. As such, if you need a lot of outside motivation to excel, freelancing may not be for you. There's no structure and defined path to success in freelancing--in fact part of the appeal is that you carve your own path. For many, they prefer a much more structured and guaranteed path.

9) Freelancing clients can be a pain

Unlike having managers, freelancing means managing multiple clients. Each with their own way of working, and personalities. For some, having multiple individuals to deal with may be even more cumbersome than just having a manager. To be a successful freelancer requires a strong set of communication, professional and people skills.

In summary:

Now that we've covered some intricacies of freelancing, you can make the decision for yourself if jumpstarting your freelancing career is worth it. Even though we highlighted some stark cons to freelancing, we still believe freelancing si well worth it. In fact based on the following pros alone, it's worth a try:

Being your own boss
Endless earning potential
The ability to learn a much wider skillset than as an employee

FAQs:

What is the pros and cons of freelancing?

Pro: Freelancing gives you more creativity and allows you to develop more skills to pivot

Pro: Freelancers are their own boss and can build their own business they can be proud of

Con: Taxes for freelancers can be complicated has a steep learning curve

Con: Many of the "guaranteed" perks of being an employee don't exist such as PTO and other benefits like health insurance

What are the cons of freelancing?

Cons of freelancing

Complicated freelance taxes
Unpredictable income level
Managing multiple clients
No employee benefits like PTO or health insurance
Lonely--no team members or others who work with you

What are the pros of being a freelancer?

Pros of Freelancing

Freedom to choose what to work on and who to work with
No boss--you are your own boss and decide how to build your business
Flexibility in hours and location