Exploring the Different Definitions of Remote Work

The world of remote work can be ambiguous. There is a lot of different terminologies and if you’re new to it—it can be a little challenging to figure out exactly what you’re signing up for. The first step is to get acquainted with the language. Let’s take a look at different types of so-called ‘remote’ work and dig into what they really mean.

Remote Employees

The term remote worker is generally used to refer to employees that have remote-working flexibility. When you are an employee of a company, you receive a payroll check for your hours or salary and your employer takes care of your tax withholdings and benefits. While many workers prefer stability and ease of employment, it does come with certain expectations. 

Remote work gigs can be full-time or part-time depending on the opportunity. Some require you to live in a certain geographical area or report to an office sometimes with the flexibility to work remotely others. And some offer complete geographical freedom and 100% remote work. Remote work is available in almost any field from sales and customer service to software development, graphic design, and journalism.

The pros of being an employee include:

• A Reasonable Expectation of Stability

• Your Taxes are Much Easier to File

• You Get Benefits like Group Health Insurance & Paid Sick Days

• Consistent Paycheck

• Familiar Structure

What to consider before making a commitment:

• Scheduling & Hours Worked Commitments

• Limited Amount of Time Off

• Fixed Salary & Slow Growth

• Generally a Long-Term Commitment with No Set End Date

Freelancer or Contractor Work

A Freelancer or Contractor is not directly employed by an organization—meaning they are not on their payroll. Instead of a typical working arrangement, they are hired and paid by the gig. However, because they are not employees, they have complete autonomy outside of the scope of the project they have been hired to complete.

These opportunities can be one-time gigs or on-going work depending on the arrangement. However, there is typically no guarantee of stability. Freelance or Contract work is popular for writers, editors, graphic designers, web designers, and similar creative roles.

The upside of being a Contractor or Freelancer:

• Flexibility to Choose and Change your Hours

• Work When & Where You Want

• Direct Control of Income

• Low Overhead Puts Profit in your Pocket

• You’re in Control of Everything—the work, the clients, the hours, the pay.

What to consider before going this direction:

• Potential Inconsistent Work until you build out your pipeline

• Switching between different concurrent projects can cause stress without organization

• You’ll Pay Your Taxes Directly

• Self-Employment Tax

• Lack of Structured Benefits

• Private Health Insurance is Expensive

Watch out for companies that don’t follow the terms of the contract, such as treating the freelancer like an employee by making demands on time or working location.

Another pitfall that can occur sometimes is equating an hourly wage with freelance rates. There are many unseen ways that employees are compensated for their work. Their hourly wage is only one piece. As a freelancer or contractor, you have to pay your taxes, cover your insurance, and allocate funds for other traditional benefits like sick days or vacation time.

Self-Employed Service Providers

There is a less clear line between freelancing and self-employment. For tax purposes, there isn’t really any difference. But in the business world, there are small distinctions. For one, freelancers tend to work alone and perform work for a small handful of clients without a formal business model or plans to expand.  A self-employed service provider may work alone—like a solopreneur, or they may grow a small team of freelancers, contractors, or employees. Many web designers or digital marketers adopt the self-employed service provider model.

The benefits of being a self-employed service provider:

• More Flexibility to Scale, Grow, and Make Money

• A Better Professional Image (Compared to Informal Freelancing)

• Complete Autonomy

What to consider before establishing a business:

• Legal Structure and Taxes Get More Complicated

• Running a Business Takes Acumen

• Do Want to Spend your Time Creating or Running a Business?

The line between being a freelancer and a self-employed service provider is often unclear. The two do not have to be mutually exclusive. A freelancer can work alone while also building a personal brand. And a self-employed service provider can choose to spend more time providing services than building a business.

The Bottom Line on Being ‘Genuinely’ Remote

If you are looking for a remote work opportunity—or you are already in one—a clear understanding of expectations is essential in protecting yourself. First, decide if you want to be an employee or if you want to do your own thing. There is no right or wrong answer—and both can be lucrative remote work opportunities, but they do come with different expectations. 

Remote employees can have less flexibility in terms of what they work on and when they work but greater access to benefits and more stability in income. On the flip side, freelancers and self-employed service providers have complete autonomy. They can decide when, what, and how much when it comes to working. But their success—professionally and financially, is completely self-governed and that can be terrifying for some while exhilarating for others.