Freelancing offers flexibility and freedom to work, however, the downside is that you only make money when you work actively or when you have assignments at your hand. If you do not work or do not have assignments, you will not have an income. Therefore, there is a lot of downside in full dependence on freelancing, you also need other income sources, most importantly, passive income. Depending on your skills and experience, options like blogging or starting a YouTube channel can be excellent ways for freelancers to create reliable sources for passive income.
Drawbacks of Freelancing
- Thread starter nomad
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The full drawback of Upwork is set anytime profile to a private account without your permission, you could have the blue badge but this is only a badge after verification and even if you boost your profile and submit for work and pay money for the availability badge as you are begging for money while it is your full right to work, you need to request every time to profile set to public.
The main problem comes from freelance work is we don't get work on regular basis, we get it after gap and sometimes there remain no work. I am trying to get work in Upwork from long time but till date I am failed to get work from there.
Hardest part is get reputation. This is common things with new business owners. Without reputation no jobs and income. As freelancer best is at first collect customers trough regular channels and current job and later go as full time freelancer.
The mishap concerning freelancing in my country is tax legislation. So cumbersome and burdening that the only desire is to quit. As it happens in Spain, it costs a shameful monthly amount to pay Social Security and in addition, each completed task costs a certain amount to pay to Municipality too. Imagine: you receive 5 dollars in change of a GIG and you must pay 60 to Social Security and Municipality. To not talk about the accounting entries and the Tax Rate calculation. A lot of times, an accountant is needed, so a freelancer in my country must face the aberration to pay a shamefully high amount into Social Security, Municipality and accountant fees, having earned only 5 dollars. It's a nonsense, but the bureaucracy in my country it's a nonsense itself.
That's true though, once you are new, no one would be willing to give your services a try, thereby making it hard to get customers. The early stage is usually the hardest though.
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- #10
I cannot imagine to pay such a hefty tax. However, I also have to pay Hugh taxes on my freelancing income, our government charges around 8 percent taxes for the income you make by working online. However, a lot of people use illegal methods to receive funds so that they can avoid paying taxes.
You are still lucky to only pay the 8 percent, compared to South Europe, where you should pay the 26% as a freelancer (in addition, you'll have to pay Social Security and then accountant fees, that use to cost around 300 to 500 euros per month). In my country, you pay the 2% taxes for each task, but the biggest amount (that fixed amount of around 60 dollars, that in Spain becomes 300 euros per month) goes on Social Security fees.
No, in the case of traditional 9 to 5 offline job it's the employer who is legally forced to pay maybe higher taxes for the sake of the employees (even if it's to say a lot of time employers commit tax evasion and the employee pays the piper if he/she isn't able to show the proofs he/she worked for this or that company).
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- #14
What reasons do they give for charging higher taxes for freelancers? In our country, if you work for home grown clients, your clients are supposed to pay taxes. However when you work for international clients you will have to pay the taxes.
These are countries laws we cannot do nothing to change them.
Various governments in southern Europe and Latin America are corrupted, so they give the specious reason that freelancing is a get rich quick profession (especially in southern European countries) and it deserves to pay huge taxes. That's one of the reasons many south Europeans prefer to leave their countries.
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- #17
That's so unfair. In my home country, the government does not still believe it is possible to make money online. That's why it has not started crafting laws that make the job easier. However, banks charge fees and tax cut everytime you receive money.
It is never adivsable to just rely on freelancing to generate enough income for one's survival.
