Employee or Self-Employed: Weighing Up the Pros and Cons

When it comes to earning a living, most people face two broad paths: working for someone else as an employee, or striking out on their own as a freelancer, contractor, or business owner.

Being self-employed has its pros and cons too.

Neither option is perfect, and both come with their own set of rewards and headaches. It’s less about which one is “better” and more about which suits your personality, circumstances, and stage of life.

The Employee Life

Working as an employee tends to provide a sense of stability. A regular pay packet, superannuation (or pension contributions in the UK), and entitlements such as sick leave and holiday pay are all part of the package. For many, that financial predictability makes it easier to plan for the future, whether that’s taking out a mortgage, raising a family, or just sleeping soundly at night.

Employees often benefit from structure, too. You know when you’re expected to show up, what your responsibilities are, and who you answer to. Training opportunities, career progression within a company, and workplace camaraderie can also be big drawcards.

On the flipside, being an employee can feel restrictive. Your hours and tasks are largely set by someone else, office politics can be draining, and decisions are often out of your control. Climbing the ladder can also take time, and not everyone is keen on waiting years for a promotion or pay rise.

Going Out on Your Own

Self-employment can be hugely appealing for those who value independence. Being your own boss means you set the rules – from the hours you work to the projects you take on. There’s potential for greater earnings if things go well, and the satisfaction of building something that’s truly yours is hard to beat.

That said, the freedom comes with risk. Income can be unpredictable, particularly in the early days, and there are no built-in safety nets like paid leave or employer super contributions. Managing everything from tax obligations to marketing your services can feel overwhelming, especially if you’d rather focus solely on the work itself.

Self-employment can also be isolating. Without colleagues around, you miss out on the daily banter and support of a team. It requires a lot of self-discipline to keep things ticking over when there’s no manager looking over your shoulder.

Final Thoughts

At the end of the day, both employment and self-employment come with trade-offs. Some thrive in the security and structure of a traditional role, while others flourish when left to chart their own course. Many people move between the two at different points in life, depending on their goals and circumstances.

Disclaimer: This article is intended as general commentary only and does not constitute financial, career, or legal advice. Always consider your personal situation before making decisions about employment or self-employment.