What Is the Definition of Freelance Work

Freelancer working from her home office
Freelance writers are independent contractors.

What is the definition of freelance work? If you're thinking about beginning a career as a professional writer, it's important to make sure you understand how to correctly answer this question.

Freelance Job Opportunities

The Internet has opened up a large world of freelance job opportunities. Aside from freelance writing, some of the many types of freelance work available include:

  • Copy editing
  • Search Engine Optimization (SEO)
  • Research
  • Data entry
  • Web design
  • Graphic design
  • Computer programming
  • Consulting
  • Tutoring or teaching

What Is the Definition of Freelance Work?

From a legal perspective, a freelancer is considered an independent contractor. As a general rule of thumb, a person is considered an independent contractor if the company has the authority to direct only the result of the work and not the actual method used to accomplish the work. Since every freelance writer has their own unique writing process, this should seem quite logical. However, there are also a number of other criteria that can be used to legally distinguish between an employee and an independent contractor.An employee:

  • Has a pay rate set by the employer
  • Is provided health insurance, life insurance, paid time off, or other benefits
  • Is directly supervised when performing work related tasks
  • Has the company provide job related training
  • Generally works only for one company
  • Receives the tools and equipment needed to do his job
  • Has a long term relationship with the company
  • Generally has a work space provided by the company
  • Must work the hours the employer wishes
  • Is not allowed to hire assistants to complete aspects of assigned work tasks

An independent contractor:

  • Can negotiate his pay rate
  • Receives no employment benefits
  • Has great freedom in performing work related tasks
  • Already has the necessary skills to perform the job
  • Typically works for more than one company
  • Pays for his own work related supplies and equipment
  • Typically works on a per-project basis
  • Generally works off site
  • Is free to set his own work hours as long as the job gets done by the agreed upon time
  • Can hire others to help assist with specific aspects of a task

Tax Liability

What is the definition of freelance work? The primary reason it is important to have an answer to this question is to define tax liability. If a worker is legally considered to be an employee, the company is responsible for paying Social Security, state and federal unemployment tax, workers' compensation, and disability premiums. If the worker is considered an independent contractor, however, the company is not responsible for these taxes. Freelancers, because they are considered independent contractors, must pay a self employment tax that covers the standard worker portion of their taxes plus the portion an employer would normally pay.

In recent years, there have been many cases in which companies have incorrectly classified employees as independent contractors in order to reduce their tax burden. However, if the IRS finds that an incorrect classification has been made, the company may be held liable for past taxes.

About Sole Proprietors

In most cases, freelance writers are independent contractors as well as sole proprietors. A sole proprietorship is a type of business entity that is run by one person. All profits accrue to the owner. The owner pays self employment tax on income received instead of the corporate taxes paid by larger businesses. Most sole proprietors simply do business under their own name, although some register a trade name for this purpose.

Additional Information

To learn more about how freelance work is defined, LoveToKnow Freelance Writing suggests visiting the following helpful resources:

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What Is the Definition of Freelance Work