Freelancer ‌vs‌. ‌Employee: ‌Who‌ ‌Earns More?‌

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Often times, when people consider making the move to freelancing, one of the first lines of inquiry is whether they’d make more or less working on their own than in a typical 9-to-5 full-time job. So in the battle of freelancer vs employee, do freelancers come out on top?

Freelancer vs employee: Advantages and disadvantages

Before we jump to the part about who earns more, let’s first take a look at some of the advantages and disadvantages that both freelancing and a full-time job have to offer:

Advantages and disadvantages of freelancing:

Advantages:

There are loads of advantages of freelancing but some of the most prominent ones include:

  • Flexibility
  • No fixed hours
  • Time off whenever you need it
  • Increased revenue
  • Higher learning curve

Disadvantages:

Sounds intriguing right? Not so fast! There are also a few disadvantages that you’ll want to keep in mind before taking the leap:

  • No stable work-flow
  • No stable income
  • Isolation
  • Difficulty in managing work and life

Advantages and disadvantages of a full-time job:

Advantages:

Choosing to work as a full-time employee can allow you to experience many advantages, some of which include:

  • Stability in income
  • Paid time off
  • Retirement plans
  • Advancement opportunities
  • Fixed schedule

Disadvantages:

Like freelancing, there are a few disadvantages to consider in a full-time position as well:

  • Inability to choose projects
  • Consuming social life
  • Clashes in the workplace
  • Office commute

As we can see, freelancing has a number of benefits – most notably, the freedom to decide how to spend your time and what kind of projects you’d like to work on. 

But can you also expect to earn more working as a freelancer than as an employee?

Turns out, you can! An increase in income is generally something you can expect as a freelancer.
 

Most freelancers earn more than full-time employees

We asked our community whether or not they earn more than regular employees who do similar jobs.

The results paint a pretty clear picture in 2019:

Freelancer vs. employees - Survey results 2019
Freelancer vs. employees – Survey results 2019

61 percent of participants surveyed in 2019 said they earn a higher income than they would if they had a full-time position at a company.

We often talk about how many challenges freelancers go through. Being self-employed often comes with less security and stability. But as it turns out, it also comes with higher pay for most freelancers out there!

In 2021, we asked our IT freelancers again: Do you earn more as a freelancer than your colleagues working a full-time job?

These were the results we found:

 Freelancer vs. employees - Survey results 2021
Freelancer vs. employees – Survey results 2021

Last year, 59% of freelancers told us that they were earning more than their counterpart person working a full-time job. That’s down by 2% since 2019.

On a different note, both in 2019 and 2021, 12% of freelancers said they were earning less than their employee colleagues.

Why could this be? 

Making as much money (or even more) as you would in an office takes time.

On average, freelancers who participated in the survey had been freelancing for 10 years. So if you’re at the beginning of your freelance career, don’t give up so easily.

You need to give your business a chance to grow and make it easy for clients to find you and your work. Check our guide on how to get started as a freelancer.

Around 11 percent of our survey respondents break even with employees.

While this is, of course, a real scenario for several freelancers, at the end of the day it comes down to your role and the field in which you freelance. 

The potential to get more per hour than what you would as a full-time employee is much bigger in the IT sector where the demand for professionals is very high (Please bear in mind that the average hourly rate amongst IT freelancers in the survey was: $105/hour).

Unlike an employee, you don’t have to rely on your boss noticing how good of a job you’re doing to increase your salary. There are no negotiations in which you have to prove how good you are. As a freelancer, your market your freelance services and your efforts directly translate into getting paid more.

Why do freelancers get paid more?

  • To cover the financial insecurity that comes with not having a fixed regular income.
  • They have to cover all the freelancing insurance by themselves.
  • Freelancers have to cover sick days or vacations.
  • They have very specialized skills that they brush up regularly to stay up to date.
  • Pay for their own workplace – it might be home or somewhere else.

Portfolio Dragos Muntean

What is the average hourly rate of freelancers according to industry?

In the end, freelancing is not as lucrative for all industries. Freelancers who can get repeat work from clients or work on a retainer agreement have higher chances of earning more than a salaried worker.

Analysing the data by industry, we see that freelancers particularly working in SAP, and Consulting seem to generally earn a lot ($110 per hour and $128 per hour respectively).

IndustryHourly rates by area of expertise
Management & consulting $128
SAP $110
IT infrastructure $105
Engineering $95
Graphic, media & content $67

Would you like to read the complete report on the freelancer survey? You can get a free copy here:

Freelancer survey insights 2021
Freelancer survey insights 2021

How does your reality stack up compared to the results? Discuss the survey in the comments below this article!

Natalia Campana

Natalia is part of the international team at freelancermap. She loves the digital world, social media and meeting different cultures. Before she moved to Germany and joined the freelancermap team she worked in the US, UK and her home country Spain. Now she focuses on helping freelancers and IT professionals to find jobs and clients worldwide at www.freelancermap.com

By Natalia Campana

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