Pros and cons of being self-employed

2 September 2015
Separating yourself from the herds of salaried employees to become a self-employed master of your own universe is a gamble that can pay off in a variety of different ways. 

But every gamble involves taking risks that need to be weighed up against the rewards on offer. To wager with your own career without considering such risks would be reckless, so it is wise to conduct some sort of cost-benefit analysis before you take the plunge into self-employment.

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Of course, too much analysis leads to paralysis, but let?s look at some of the basic pros and cons of being self-employed.


Decide your own work hours

One of the most common reasons for taking up self-employment is a desire for better work hours. How many times have you thought that you needed that extra hour of sleep in the morning? When you?re self-employed, you decide when you want to work. Take a holiday whenever you want, finish earlier in the day – all up to you. Flexibility over your work hours also comes with a downside though…

Work where you like

Many small businesses can be operated through the use of just a mobile phone, computer and internet connection. Self-employed people running these types of businesses can work anywhere in the world they like. You can work from your bedroom in your pajamas or beside the beach – now that?s freedom! Even if your business requires an office, practice or shop, at least you can choose its location.

Tax advantages

Many things become tax deductible if it?s purchased for the sake of your business. Anything you pay for that?s directly related to you earning your taxable income is considered a business expenses which can be claimed. Such expenses range from advertising expenses and business insurance to asset purchases such as cars and warehouse fixtures. The government?s recently-introduced $20,000 tax write off is a current tax incentive to keep in mind.

More control over your income

You?ll never complain that you should be paid more because you?re responsible for your own income. This could provide you with more of an incentive to work harder because there?s more of a correlation between your effort and your income.

Choose the people you work with

Self-employed workers are not forced to deal with frustrating clients or be around co-workers they aren?t comfortable with. They have the power to decide who they associate with.

Do what you love

Instead of being given dreaded tasks by your boss that make you feel undervalued, you can do what you feel you do best and are most passionate about. You are free to carry out more fulfilling tasks that you believe best utilise your skills.

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Time not working is time not earning

You may enjoy your time off work less when you think this time could be spent earning. You might also worry that you?re letting your clients/customer?s down when you?re not working. You may end up working far more hours than you did as an employee. 

Possibility of irregular pay

When you?re self-employed, your income can be quite varied. There may be periods where you are very busy with clients and other times where you have ?droughts? with no clients. The irregularity of your pay can make settling regular bills and loan repayments difficult. Irregular pay can also make it more difficult to obtain a home loan – although there are a good range of competitive low doc loans available in the market. You can compare low doc loans here.

Do your own bookkeeping

Methodical bookkeeping is required for all small businesses and it can take up a lot of your time. It can also be stressful if you don?t know how to do it properly.

No sick pay, annual leave or company benefits

Sometimes you can?t afford to be too sick for work because you?ll potentially miss out on earnings. Being self-employed you also aren?t eligible for things like paid annual leave and company benefits such as gym membership, dental insurance or company cars.


It can be lonely for self-employed people working entirely on their own. You may miss teamwork and not being able share your work?s victories and frustrations with colleagues. Without the get-togethers, social clubs and sports teams that a company has to offer, you might become more of a hermit – totally engrossed in your work.

No superannuation payments

Superannuation isn?t automatically set aside from your pay. You?ll have to be disciplined and set aside money for your retirement yourself. It can be tempting to withhold from your superannuation contributions when your business is going through slow times.

Take the good with the bad

Being self-employed isn?t always going to be smooth sailing, so take the good with the bad and make the most of having the freedom to do your own thing. Even if it all fails, at least you won?t regret that you were never brave enough to have a go.

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