Employed vs Self-Employed: Which Is Better?

4 months, 2 weeks ago by Oliver Atkinson

If you’re a professional - no matter your age - questioning whether your career path is the right one for you is a very common dilemma. Be you an artist or accountant, translator or trainer, a large part of this internal conversation comes down to whether you feel you’d thrive best at someone else's company or alone.

For some people, this decision is a no-brainer, but if you're one of the many people that are unsure about whether you're best off employed at a company or growing your own business, then read on as we discuss the pros and cons of employment and self-employment.

Are you self-employed in the Brighton & Hove area and struggling to keep up with your accounting obligations? Speak to Atkinsons Accountants and we'll see how we can make life as your own boss a little easier through our contractor accountant services.

Self-Employment: Freedom, Flexibility, Admin, and Accounting

Self-employment is an enticing but drastic step-change in a person's life, but why?

Well, the ramifications are equally as drastic. Self-employment is the brave decision to enter into a specific industry and contribute to it in your own unique way.

With this comes the alluring prospect of professional freedom that self-employment offers.

This kind of freedom also brings with it flexibility that allows you to create your own version of work-life balance. Choose your hours and clients - if the work is remote, you can even choose where you work! Are deadlines coming at the same time as your travels? Bring your laptop, find the closest Wi-Fi-enabled coffee shop and crack on!

The potential is, in theory, limitless once you make the jump to working for yourself, but before you close this tab and begin on your letter of resignation,, remember that potential doesn't come without sacrifice, and just because the world is your oyster doesn't mean you'll immediately have it in your grasp - not at least without putting in some serious, consistent work.

One of the most important things to keep in mind when going self-employed is that your accounting and tax planning are all down to you. Where an employee's taxes are deducted directly out of their wage, there is much more heavy lifting on the part of the self-employed to ensure that they stay legally compliant with tax laws and are paying their dues consistently and on time.

Are you thinking of freelancing or hoping to eventually grow a business in Brighton?

The young experts at Atkinsons Accountants are proficient in cloud accounting software and can help create a bespoke accounting package that will cater to your unique accounting needs. If you want to know more, give us a call on 01273 771 122.

How Is a Self-Employed Person Paid?

If you own or are a shareholder of a company, your income may be in the form of dividends, which will depend entirely on the company's financial performance. This is usually paid out after a company’s performance has been evaluated at the end of a financial quarter, and is a proportion of the profits that a company earns.

If you're a freelancer, you may invoice clients at different rates, at different times, and for different services, meaning that your income may not only be inconsistent but also in a state of flux depending on the work being done and the ability for the client to pay the invoice on time.

The expert accountants at Atkinsons’ Brighton office understand the pride and importance you place on earning your own income - however it comes in. Never lose that priceless feeling with our complete range of accounting and tax services.

Employment: Security and Separation

As already discussed, job security is a huge benefit of full-time employment - and not just in receiving regular and consistent income. Sick leave, annual leave, integrated pension schemes, and maternity leave are all crucial financial structures for those in employment. For those that are self-employed, however, these benefits don't exist.

Though, saying that, the idea of just 21 days a year (outside of weekends) dedicated to your own time can be a difficult pill to swallow for many people who desire more freedom and less rigidity in their lives. One perk of self-employment: there are no restrictions on holiday leave.

Another, less discussed, element of full-time employment is its social nature. In the post-Covid era of the home-working culture, the humble office is rarely given credit for its part as a creative hub for the millions of people who have gone on to become good work colleagues and even better friends.

Say what you may about the office but, done right, it can be one of the most energising places a young professional can exist in. This isn't to say that an office can't become a place of toxicity and distraction if the people or work culture are less than ideal.

Despite this, the office also acts as a designated flagpole of productivity that more easily enables you to get into a working mindset. Located away from a person's home, offices allow for greater separation of work from home and that all-important work-life balance that we all crave - though the five consecutive days and regular commuting may get in the way of that more than we think.

Vertical Growth

Another important factor of employment comes from the professional development that it can bring. Work at a business long enough and you will likely have the opportunity to grow and develop your skills within a different or adjacent role.

This kind of movement within a company acts as a yardstick for a person's development and expertise, providing them with goals and milestones as well as an attractive pay rise.

When you work for yourself, there is no branching hierarchy to move along, and no structure to use as a comparison of professional development. It is up to the self-employed to decide what they are within their industry. Whilst this can be satisfying in its own way, approval and acknowledgement from a team are likely major factors in the appeal of vertical career growth - something that is entirely lacking when you work for yourself.

Employed vs Self-Employed: Which Will It Be?

As you can probably tell, there isn't a wholly right or wrong answer when it comes to your career future. Both employment and self-employment have their own slew of pros and cons, and they can both be beneficial or detrimental depending on your lifestyle, personality, and goals.

If your number-one priority in life is to gain experience and take ultimate control of your work, then expect a little less security than being employed full-time.

If you care more about financial security and a more structured routine, then working full-time at a company will likely be the best thing for you as long as you're happy with much of your personal time being dictated by your working hours.

If you're self-employed and seeking an accountant in Brighton & Hove, Atkinsons Accountants can offer you a tailored solution. We incorporate market-leading software with qualified accountants to ensure your finances are taken care of.

If you want to know how you can take control of your finances whilst being self-employed, call us at 01273 771122 or request a free no-obligation quote online.