Freelancer vs Remote Worker: What is the Difference?
While employers are busy with building nicer workplaces and integrating different methodologies to improve the office culture and morale, new trends are emerging in the labour market. What we call a virtual staff, is slowly kicking out the traditional office employment and comes to help companies get rid of a lot of headaches.
If you are considering to switch from in-house team model to virtual team model, you might have considered two options: hiring either freelancers or remote workers.
Are they different? Let’s unlock the differences in hiring a freelancer and a remote worker.
Who is a freelancer?
Freelancers are self-employed business owners who work independently on their own ethics. They usually perform tasks for multiple clients and charge based on hourly rates, project fees or ongoing contract terms.
As they are self-employed, they are obliged to look after their own tax and do not receive employee benefits from the companies they work with.
By 2028, 73% of all departments will have remote workers
Who is a remote worker?
A remote worker is someone who works outside of the office. This type of employee has the freedom of location and can even be hired to work from anywhere around the globe.
As an employee, the company is responsible for providing a safe environment, the tools and resources needed for the role, including a regular award wage or salary, insurances and tax obligations.
Freelancers
Place of work: Remote
Employment Status: Self-employed
Tax Responsibility: Pays self-employment tax
Benefit receiving eligibility: Not eligible
Project duration: Short time
Remote workers
Place of work: Remote
Employment Status: Works for onе company
Tax Responsibility: Company withholds taxes
Benefit receiving eligibility: Company provides benefits (health insurance, wellness programs, etc )
Project duration: Long projects
Freelancer vs Remote worker: who to hire?
Understanding the freelancer vs. remote worker categorization is important for every company that wants to virtualize its working processes.
In both cases, the company should be prepared for increased communication and come up with verifiable metrics for evaluating work.
While freelancers are perfect for short term projects, a virtual team is going to take your long-term projects to the next level by boosting your productivity and increasing the quality of work.
