The world of work is rapidly changing, and with this comes a wave of digital nomads who are working from beaches in Asia, coffee shops in Europe and airport lounges all over the world. More and more people are turning to a life of freedom and freelance – and why wouldn’t you when you can run your business from tropical climes?
Both as a full-time career and a side-earner, freelancing is a growing trend all around the world. However it may seem like a dream to travel the world, or work from home, rather than commit to the daily grind every single day, but there are some things that will need to be considered before jumping headfirst into the world of freelancing.
Often, companies employ freelancers for a short-term project which needs to be completed by a certain date but who do not have the resources in-house to complete the work. It is essential for freelancers to write up contracts for clients to sign as this protects the freelancer and makes it crystal clear about what is involved for everybody. A contract will state all of the work that is required, deadlines, as well as payment terms and agreements
Now that you are a freelancer, you are responsible for your own taxes. After you have invoiced your client, they will not hold back any percentage of the money to go towards what you will owe at the end of the tax year. It will be up to you to put aside 25-30% of your income. A good way to do this is to set up a separate bank account which you cannot access with a debit card, where 25% of your earnings automatically go each month. Remember that there is a deadline for filing your tax return each year, and although you won’t get a personal call from Antonio Horta Osorio telling you off, you will be required to pay a fine if you don’t file on time!
Holiday and sick pay
As a freelancer, both holiday and sick pay don’t really apply to you. If you are sick and can’t work, you will not get paid that day. If you go on holiday, you will not be paid for the days you are away. Simple. However, the perks of being a freelancer are usually that you earn more to work less, so just make sure to put away money on a frequent basis to cover rainy days and any sickness.
Now that you are working for yourself, there is nobody breathing down your neck and making sure you are working properly. You will need to be strict with yourself, and try not to get distracted by the TV, the sun, or spontaneous lunches with your friends on Friday afternoons, unless, of course, you have the time to do this. When it comes to managing your day, it’s best to work with what you naturally do: if you are an early riser, then work in the mornings and finish earlier in the day, if you prefer a lie in, then wake up and finish work later.