Know The Difference Between Self-Employed VS Employee

When it comes to employment, we used to hear about self-employed and Employee quite often. Today, It's time to know the difference between self-employed and Employee. Let's get started. 

Self-employed refers to the person who performs work for her or himself, or by being the owner of the business, as a freelancer, independent contractor for any of the external companies.

And the Employee is defined as the person who does not work independently but works under the contract of any company.

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What Is Self-Employed?

As the name indicates, a self-employed person finds out the ways of earning on his own. 

They do not work for someone. They do their business, work as a freelancer, or may work as an independent contractor.

In other sense, these types of persons are also known as an entrepreneur. It means they want to work by themselves, not with co-workers. 

They only do the leadership of work. The individual is known as self-employed when

  • He will be in the business wither part-time or full time

  • He will be a member of any business partner who leads the business or makes some trades.

  • When the person carries on trades just like an independent contractor

pros and cons of employee

What Is An Employee?

An employee is a person who is hired by any organization, government, small business, or company to do particular work and get some compensation. 

A company will hire an employee after a specific procedure, including application and interview. The terms and conditions are classified according to the nature of the job.

Differences Between Self Employed And Employee

1. Risks And Freedom Involved In Self Employed And Employee

A self-employed individual means a person running his own business. An independent individual is free to work within selected hours and work according to their way, but there exists a high risk of losing out of revenue.

A business may ruin due to some reasons at any time. While a government employee works according to a proper schedule as provided by the supervisor. 

And they don’t face any risk, including losing a job or losing investment.

2. Expenses

A self-employee bears all expenses of his business, including the direct or indirect expense. And the expense of a firm is bear by its shareholders and not by its employees.

3. Social Benefits

Employees enjoy many social benefits like health insurance, social security, and many other luxuries.

A self-employed individual does not have these facilities. Self-employee is also responsible to face all the expenditures.

4. Maternity Leave

A self-employed person has to select some days to leave. To this, the fund by health insurance can avail of some funds or bonuses as per week. But all this ultimately depends on the place where you are.

Besides this, the female employed who work under an organization can get maternity leave approximately for 15 weeks. 

Not only this, in the first month of maternity leave, but employees can also get 82 % of the gross salary. And then in the second week, 75 % of the gross salary. 

5. Illnesses Or Accidents

If self-employed becomes ill or suffers from an injury or if he had some accident, then he can get a daily allowance of $ 35 within the second week of any illness or accident.

But for self-employed, there is not any policy like accident insurance. As compared to this, they have an opportunity for income insurance when the self-employed are suffering from illness or accident.

Workers get their income regularly in the very first month. Then they get 60 % of the salary within the second week. Employees can get help payment by EIC- Employers Insurance Company.

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6. Holidays And Unemployment

Self-employed persons are not able for unemployment benefits and repay their leaves. In case of bankruptcy, self-employed can get an allowance of the upcoming 12 months.

Besides this, as compared to self-employed, employees also have the availability of paying their leaves and can even get benefits from unemployment.

7. Position

Self-employed are entirely in charge of decision making and business. But the employed never are entirely in charge because they are always under the authorized authority.

pros and cons of self employed

Pros And Cons Of Self-Employed


  • Self-employed can set their job hours.

  • Self-employed can choose who can work with whom or who should not work with whom.

  • Self-employed have particularly excellent grip overall processes, clients, work, time, contracts, and everything.

  • Self-employees can do their work even in a suit or pants coat.


There are some disadvantages to be self-employed:

  • Self-employee does not rely on any other.

  • Self-employee does not have any manager to set deadlines or tasks because he is self-imposed.

  • They have to follow strict time management, which is mostly hard for self-employed.

  • No kind of benefits or company insurance

  • Not any paid vacation, illness or accident time and maternity leave

  • Reduced stability for income.

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Pros and cons of Employee


  • Employees can get holidays, can enjoy with their families and can enjoy their paid time.

  • Fixed and guaranteed income and can be deposited into their bank accounts on a monthly or weekly basis.

  • Employees agreed to work on their fixed hours more often.

  • They are not as responsible as self-employed. They are only responsible for their work.


  • Employees are strictly bound to follow the instructions and orders of their boss.

  • They are dependent on their monthly fixed income only.

  • They have limited income.

  • Employees do not have any job security; they can be fired at any time.

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