Freelancers vs Employees - Who earns more?

09.12.2019

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 do freelancers make more money than regular employees?

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 2017:
 


 

56 percent of our survey participants 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 2019, we asked our IT freelancers again: Do you earn more as a freelancer than your colleagues working a full-time job?

These are the results of our freelancer survey in 2019:

Freelancers earn more than full time employees

 

This year, 61% of freelancers told us that they were earning more than their counterpart person working a full-time job. That’s up by more than 5% since 2017!

On a different note, both in 2017 and 2019, 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 10 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: $93/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 vacation.
  • 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.

 

Which industries offer higher pay to freelancers in comparison to full-time employees?

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 more than salaried employees (67% and 68% respectively).

Unfortunately, just 37% of freelancers working in graphic, media and content - more creative field - said to be earning more than full-time employees.

Industry % of freelancers earning more than employees
SAP 68%
Management & consulting 67%
IT infrastructure 64%
Engineering 49%
Graphic, media & content 37%

 

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

 

Download your free copy of our freelancer study

 

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

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Comments

  • Commented by pranita deshpande on 21.11.2018 at 19:00 h

    What types of article you want?

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