Self Employment vs. Freelance – What’s the Difference?

When you work independently, you’re able to experience a great deal of freedom and flexibility. Whether you’re a freelancer or a self-employed worker, there are several appealing perks, from broadening your skillsets and professional growth opportunities to creating a work-life balance fully catered to you. But as with any type of job, there are some downsides, including fluctuating workloads and inconsistent earnings.

The terms freelance and self-employment are often used interchangeably, but there are some subtle distinctions between the two you should know about. Working as a freelancer and working as a self-employed individual differs slightly based on for whom you’re working, what you’re producing and/or selling, and other important factors.

Differences between self-employment and freelance work


Today’s U.S. workforce includes about 16 million self-employed workers, according to Pew Research. Self-employed workers are able to enjoy autonomy, as they essentially run their own businesses and are highly skilled in specific trades.

People who are self-employed have the power to decide exactly what projects they work on, determine when and with whom they work, and dictate their own personal work styles. However, they are not under the jurisdiction of employers.

Common examples of self-employment include:

  • Business owners
  • Salespeople
  • Tradespeople
  • Investors
  • Lawyers
  • Actors

There are three main types of self-employment, according to Corporate Finance Institute:

  1. Sole proprietorships are businesses that are owned and operated by an individual. These sole proprietors/business owners may hire temporary or permanent workers to assist them with certain jobs.
  2. Independent contractors are individuals who perform specific jobs for clients at a price.
  3. Partnerships are arrangements between two or more individuals who manage and operate a business together and share in its profits.


Freelancers are people who work on numerous short-term projects. While freelancers are technically self-employed, the main difference is that freelancers work from the direction of clients.

Freelancers usually work on multiple projects at once for a range of clientele who, in turn, pay for specific products or services. Freelancers also typically work alone to accomplish their clients’ goals. In other words, clients are empowered to provide input and grant approval on the final deliverables. Freelancers must achieve clients’ requests within a defined scope.

Examples of common freelance jobs:

  • Writing
  • Graphic design
  • Website development
  • Consulting and advising
  • Photography
  • Private tutoring

In short, all freelancers are self-employed, but not all self-employed workers are freelancers. But no matter your employment situation, securing your assets with business insurance is vital, especially in today’s volatile economy. If you have questions on which coverage is best for your needs, contact your local Rural Mutual agent.