Full time job or self employed?
Trying to decide between working a Full time or self employed is tough. We’ve all had that feeling, the usual Monday morning head funk where we wish that we didn’t have to get dressed, jump in the car and make that slow, painful journey to work. The appeal of waking up and working in your pyjamas for the day and drinking tea can be really tempting but have you ever really sat and thought about the pros and cons of being employed versus self-employed? Well, here is your guide to what to expect, or not to expect about quitting your day job to become your own boss because deciding between a full time or self employed is hard.
Employed: the wonderful feeling at the end of the month when that nice chunk of cash hits your account, knowing that what you are about to get will cover the bills and essentials that you need. The thought that all those stressful commutes and hours spent with that employee you can’t stand was worth it because you now have that money. The fact there is no stress related to tax, national insurance, pension contributions, student loan repayments and childcare vouchers as your employer has already calculated and deducted what you owe – every penny in that wage slip is now yours.
Self-employed: the end of the month comes and you are still chasing invoices for that payment you desperately need. The feeling that halfway through the month you seem to be behind on your expected income and are now trying find a few ways to boost what you will earn. Keeping receipts and tracking your monthly income/outgoings ready to do your tax return.
Annual Holiday Leave
Employed: “Boss, can I have this week off in April?” – “Yes Employee, have a great holiday knowing you will receive your holiday pay”
Self-employed: you either take the hit and not earn for your time off, work extra on the run up to your holiday, increase the prices of your services to cover yourself for holidays or just never have a holiday.
Employed: “Hey boss, I’m sick” – “No problem Employee, if you are off for more than 3 days you’ll get some money – just make sure you self-certify or grab a doctor’s note depending on the length of your sickness”.
Self-employed: very similar to annual holiday leave – work extra to make up for it, increase prices to cover it or just take an income hit.
Employed: “Hey boss, I’m pregnant” – “That’s great news Employee, take up to 12 months off – 9 of those months will receive payment and you’ll have your exact job to come back to”
Self-employed: again, similar to holiday/sick pay. You may wish to take a couple of weeks off and then get straight back in to it. You may need to pay someone else to take on your work and you may lose clients/customers. However you could qualify for 39 weeks of SMP, but only if you’ve paid your NI contributions.
Tax Credits and Benefits
Employed: you can just let the appropriate departments know how many hours you work, your expected salary, provide payslips when required and, in most cases, it’s a simple process.
Self-employed: constant changes to income, outgoings, profits etc. can make giving the appropriate departments the correct information can be difficult. Also, for most work based benefits you will now be required to prove that you are earning at least the minimum wage in order to receive any help.
Child Illness, Holidays and Special Events
Employed: though it can be a pain, booking time off for holidays and special events (sports day, Christmas play etc.) is easy enough and your child falling ill is an inconvenience for them, you might lose a day’s wage but chances are you can probably make that time up. Holidays clubs can provide additional care during the holidays which you can claim childcare vouchers for; minimising the cost.
Self-employed: it’s great, you never have to worry about taking time off for these things BUT your child is on holiday for 6 weeks, trying to continue to work and look after your child isn’t as easy as you think. They want to go to the park, on a picnic, to the seaside, they ALWAYS need feeding or a drink but you know that taking time away to enjoy this time with them may result in a loss of income; it is a hard and stressful time when you are used to doing your own thing while they are at school.
Employed: you are surrounded by people on a daily basis, whether you like them or not isn’t the case, at least they are there when you need a chat. Social gatherings such as Christmas parties, staff nights out, birthdays, barbeques and weddings all add that much needed interaction with people that many who are looking to go self-employed over look.
Self-employed: depending on your work, you might be isolated for days. There are no Christmas parties, no staff nights out and finding the time to socialise with people isn’t on the top of your to-do list when you are so focused on making sure you have an income at the end of the month.
Finishing for the day
Employed: at the end of the working day, for most jobs, that is it (some jobs may involve you taking work home). You get home and throw on the TV or games console, pick up your book, play with the children, go for a walk with the dog and enjoy your non-working time.
Self-employed: a lot of the time, you never truly switch off from work. Constantly checking emails or business pages to answer customers, or looking for work opportunities as you know that you’d kick yourself if you missed out on something just so you could watch a little TV with a loved one.
Self-employment does come with a lot of pros in the sense of being at home should your child need you or saving money on transport or childcare but what you save in those areas you spend in others (electricity, food, heating). Being able to work in your pyjamas is fantastic but you can also start taking less care of yourself as you’re not having to make an impression to others like you do in employment. You should always take time to make a decision this big, weighing up all the possibilities before taking the leap.
Have you made the jump from employed to self-employed or even vice versa? How are you finding it?