The amount of self-employed professionals has reached a record high in the UK, with millions now working for themselves, and the trend is reflected on the other side of the pond in the United States as well. But rather than reflecting an increase of people who are excited entrepreneurs and home business owners, the numbers may be a direct result of increasing joblessness, say experts. Recent headlines regarding falsified self-employed have also stirred up controversy in the UK; some employers are identifying their employees are self-employed in order to avoid holiday pay, minimum wage requirements and other obligations.
Seeking Self-Employment Jobs
When professionals are out of work, it’s only natural that they begin exploring their employment options -- and self-employment starts to look pretty attractive. But searching for self-employment jobs is practically a job unto itself. The Internet is rife with scams that fool would-be workers into giving money to fake employers, only to be burned by false job opportunities. Even when job opportunities are legitimate, they are difficult to get. Employers who hire the self-employed are offering less money for tasks, and there is more competition for each job.
Self Employment Taxes
Even those professionals who do succeed with self-employment by finding regular work at home jobs or launching their own businesses face a dismal tax future. The United States payroll tax cuts affect millions of self-employed professionals and small business owners in he country. When those tax cuts end, it will increase their already staggering tax burden.
Self-employed professionals are responsible for paying all of their income, federal and state taxes on their own -- no employer subtracts these payments from regular paychecks. And in self-employment, no employer chips in to help these professionals with their income tax burden. Workers who experience traditional employment have some of their tax burden absorbed by their employers; the self-employed must pay all their income taxes. The self-employment tax, which covers programs like Social Security, must be paid in addition to income taxes. Because the self-employed don’t receive the same tax deductions and tax breaks as big businesses, they have few options for off-setting these troublesome tax burdens.
When the payroll tax cuts end, and many in the United States are already accepting that they will as a foregone conclusion, being self-employed will be even more expensive. When there are no jobs and self-employment no longer seems possible, Americans could find themselves with few options for obtaining steady income.
KC Morgan - KC Morgan has been the featured writer in Self-Employment since 2006, using personal experience to create guides to being self-employed.
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