Self-employment is running a sole proprietorship under a commercial cooperation agreement or a B2B contract. Check who is profitable and what the rules are here.
ADVANTAGES OF SELF-EMPLOYMENT
One of the main motivations for people who become self-employed is financial benefits. An employer offering various forms of employment in a B2B contract gives a higher salary than in an employment contract. Thanks to this, you can earn more on your own business than on a full-time job.
Many people also value flexibility. Self-employed people do not have to limit their cooperation to only one client. They can work with different clients with one exception. If a self-employed person signs a non-competition agreement, they must respect its provisions.
Financial security is also important. Working for various contractors translates into stable revenues. Even when one of the clients ends the cooperation, the others allow them to achieve a satisfactory income. In the case of a full-time job, the termination of cooperation ends with the employee’s loss of earnings.
Another advantage of self-employment is the possibility of choosing the form of taxation. When working full-time, the employee must settle accounts with the tax office according to the tax scale, i.e. on general terms. A self-employed person can choose one of three forms of taxation. Instead of general rules, it can also opt for a flat-rate tax on recorded income or a flat tax.
With the general rules and the flat tax, the self-employed can include expenses related to running a business as tax-deductible costs, thanks to which they will pay less income tax. In addition, if he is an active VAT taxpayer, he can focus on the net amount when making business purchases because he is entitled to deduct VAT.
DISADVANTAGES OF SELF-EMPLOYMENT
Self-employment is not only about advantages. When considering the decision to switch from full-time to self-employment, it is important to remember about taxes and health and social security contributions, because the self-employed must pay them themselves. This is an advantage for the employer, who in such a situation pays only for the invoice received. . At the same time, it is a disadvantage for those running their own business, because they are responsible for the correct calculation and timely payment of levies to the Tax Office and the Social Insurance Institution.
A self-employed person usually does not have the right to leave or other privileges resulting from an employment contract. It is true that in some B2B contracts, employers guarantee contractors paid leave, but this is not their obligation. When calculating the potential earnings of self-employment, you have to take into account that vacation also has its price.
Another challenge is mandatory accounting. Everyone running a business is obliged to document revenues, including for tax purposes. You can do it on your own, but it is safer to outsource such a service to the EVERTE Accounting Office, which will take care of the correctness of tax settlements and social security contributions. Thanks to this, the entrepreneur can focus on making money, knowing that our Accounting Office will take care of the accounting side of his business.
