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5 Things You Should Know Before Becoming Self-Employed

In 2017, I quit my salaried job to become a full-time freelancer and never looked back.

Since then, freelance has become more than just a career — it’s become a way of life. And I never miss an opportunity to preach the freelance gospel whenever given the chance.

Luckily for me, when meeting new friends or striking up casual conversations outside of work, my freelance career often becomes a topic of interest.

While the motivation behind the questions I receive varies somewhat — with some inquirers trying to figure out if “freelance” is code for “unemployed” and others genuinely interested in following in my footsteps — I often find the same questions cropping up again and again.

In this article, I’m sharing five of the most frequently asked questions about self-employment, including how to get started, how much we make, how to find work, health insurance and taxes.

1. How do you get started as a freelancer?

While everyone’s origin story varies, the basic recipe involves:

  1. Learning a skill.
  2. Finding clients who need that skill.
  3. Getting hired to perform that skill.
  4. Getting paid.

Obviously those things are easier said than done, but at the core, that’s really all there is to it. Literally, anyone can be a freelancer.

While some career fields require special certifications and training, such as law and accounting, others require no special training at all.

Popular fields that require no formal education include software development, graphic design and writing, just to name a few.

While special training is not always a requirement, you will need to dedicate time to learning a skill or trade before presenting yourself as a professional in your respective field.

Many freelancers, like myself, are self-taught . I learned almost everything I know about graphic design from Google and Youtube.

I also recommend freelancing part time for a while before making the leap to full-time.

Freelancing part time will help you gain more real-world experience with your chosen profession, get you used to the process of pitching clients and help you decide whether or not freelance life is right for you.

2. How much do freelancers make, what do they charge and what are the most profitable fields?

Freelance income varies wildly from person to person and largely depends on your field of choice, your experience level in that field and your ability to land the right clients.

The freelancing platform released a list of highest-paying freelance jobs to CNBC last year which included dozens of careers in which freelancers were earning anywhere from $45-$85 per hour with a potential annual income of up to $170,000 per year.

The highest earners included lawyers, financial planners, management consultants, software developers, network administrators, IT professionals, graphic designers and marketing professionals.

So here’s the golden question — how much should be charging?

Luckily, the answer is simple. You should charge what people are willing to pay.

The best thing about freelancing is that there’s no ceiling to your income potential.

My rates have steadily increased over the course of my freelance career. When I was just starting out I charged as little as $20 per hour. I raised that rate when I realized I had no problem finding work and keeping my clients happy. I gradually continued to increase that rate over time.

Raising your rate can be a nerve-racking experience, but I’ve surprised myself with each bump.

Today, I earn as much as $120/hour and continue to land quality jobs, quality clients and 5-star reviews.

3. Where are the best places to find clients?

Once again, the answer to this question varies wildly based on your specific field, but as a general consensus, most freelancers believe the best ways to find clients are:

  • Networking on social media
  • Utilizing freelancing platforms and marketplace websites
  • Word of mouth referrals

However, there’s strategy involved in using each of these methods properly.

Every freelancing newbie thinks that starting their own Facebook or Instagram account is the best way to market themselves online, but in reality, that couldn’t be farther from the truth.

You don’t acquire clients by making them come to you, you need to be going to your clients.

Engage with your target audience on Facebook and LinkedIn pages organically. Express an interest in what they’re doing, cultivate an online relationship and make your interest in offering your freelance services known .

Joining freelance groups is also a great way to find potential work. Freelancers like myself rely on a network of other freelancers to scale for large projects and are always being asked by our clients for professional recommendations.

I see freelance opportunities being posted at my favorite Facebook group, Freelancing Females, on a regular basis.

I also heavily rely on freelancing platforms like Upwork to find clients. In fact, over half of my current income comes from that single platform.

It’s important to remember that it takes time to build a reputation and a robust profile on freelancing marketplaces like Upwork. It took me almost two weeks to land my first gig — fast forward to today and I’ve made over $400,000 on the platform.

The key to finding success on a site like Upwork is to be persistent and consistent. When I first started, I applied for jobs daily — to the tune of five to six per day.

Client acquisition becomes easier over time on these platforms due to the fact that the quality clients are more likely to hire well-reviewed, highly-rated freelancers. Today, I no longer apply for jobs at all. They come to me in the form of invitations to apply.

Finally, there’s word of mouth.

Word of mouth is the best way, in my opinion, to acquire new clients.

And eliciting those referrals is much easier than you might think — just ask your current client for referrals!

Afterall, potential clients are much more likely to engage your services when one of their friends or colleagues touts your awesomeness on your behalf.

In a study published by the Society for Personality and Social Psychology Inc., researchers found that having a third party sing one’s praises consistently resulted in a more favorable perception of the professional in question, along with higher pay recommendations, increased likability and an increased perception of competence.

4. Do freelancers get benefits like health insurance and paid time off?

Freelancers rarely receive benefits like health insurance or paid time off.

Most freelancers opt to be on a family member’s health insurance policy, partake in the Affordable Care Act health insurance marketplace, subscribe to private health insurance or go without.

In fact, if we really wanted to talk about freelance “pros and cons” I would put health insurance at the top of the “cons” list.

Health insurance, unfortunately, is often quite expensive. But there’s a reason that it’s not always a deal breaker for professional freelancers.

According to the average annual premium for an employee sponsored insurance individual plan is $1,644. The average individual premium of a private plan is about $5,000 — over a $3,356 difference.

But that cost is easily absorbed by an often drastic increase in pay.

According to Upwork’s Freelancing in America study, 60% of freelancers are earning more as freelancers than they did when they had an employer.

For instance, at my last salaried job, I was making $75,000 per year. Today, as a freelancer and entrepreneur, I take home nearly $200,000 per year. For me, that more than covers that pesky $3,000 gap.

And as far as paid time off is concerned, I factor that into my rates. Every year, I consider the amount of time I want to take off and the hours I need to work to hit my income goals. Sometimes I even work longer days leading up to a vacation to cover the missed time.

Once again, the increase in pay I’ve experienced being a freelancer versus a salary employee more than makes up for any time off that I require.

5. How do freelancers pay taxes

My sister, who is also a freelancer, was once asked by an acquaintance: “As a freelancer, don’t you have to pay taxes every quarter?” with the kind of tone that made paying taxes sound as delightful as stepping in dog poop.

“Yes,” she replied, “Don’t have to pay taxes with every paycheck?”

Let’s be honest, taxes are not fun, and yes they can be a wee bit more complicated when you don’t have a simple W2. But it’s not an impossible hurdle to climb.

We pay taxes just like everyone else, but the way we do it looks a bit different.

When you’re a salaried employee, you still pay taxes, but most of those taxes are taken out of your paycheck before you ever see the money hit your bank account. Out of sight, out of mind.

For freelancers, we receive the full amount, but have to keep in mind that a portion of that income belongs to Uncle Sam. And Uncle Sam likes to be paid every quarter.

As a general rule of thumb, I set aside at least 30% of each month’s profit for taxes. I know that my final tax bill may vary, but I like to be on the safe side for budget planning purposes.

And yes, this also requires a bit more time, and a bit more paperwork, but that’s why I don’t do my own taxes.

To be honest, I’ve always used a CPA. I was even using a CPA even when I was a salaried employee, and continued to do so when I became a freelancer.

Over the years, as my business grew and my taxes became more complicated, I finally upgraded to using, a service created by freelancers for freelancers, to manage my LLC’s S-corp transition, taxes and bookkeeping. Using a service like Collective essentially puts my taxes and bookkeeping on auto-pilot.

I consider professional tax help to be a nominal expense in the grand scheme of things.

At the end of the day, I choose to treat freelancing like a business. Sure, there might be a little more work involved behind the scenes to keep things moving, and a few more expenses here and there, but for me, the joy of setting my own schedule and my own paycheck makes it all worthwhile.

Tennessee native Morgan Overholt is a freelance graphic designer, owner of Morgan Media LLC and co-founder of Morgan and her team have worked with nationally recognized clientele from all over the world, including the Centers for Disease Control Foundation (CDCF), Kimberly-Clark, and Stanley Black & Decker.

Morgan transitioned into the role of freelancer and small business owner after spending nearly a decade in the traditional corporate world left her feeling unsatisfied and unfulfilled. Today, Morgan is passionate about sharing her story with other hopeful entrepreneurs who hope to follow in her footsteps. She has been featured on, Refinery29, and Business Insider.

Originally published at on January 21, 2021.



Collective is the first online back-office platform designed for self-employed people. We handle company formation, taxes, accounting, bookkeeping, compliance and more. Our trusted advisors have saved our members an average of $16,845 in taxes.

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Morgan Overholt

Morgan Overholt is a freelance graphic designer and owner of Morgan Media LLC. She is also a contributor for Business Insider and Collective.