The term “gig economy” is a workforce defined by short-term engagements, temporary work, and independent contracting.
What makes a worker a gig employee, and how do they navigate this type of employment?
At nextSource, we’re dedicated to cultivating success-based workforce knowledge—we know more than a thing or two about gig work. Keep reading as we explore the ins and outs of working as a gig employee.
What Is a Gig Employee?
Gig economy workers, or “gig employees,” include (but aren’t limited to): freelancers, contractors, side hustlers, and anyone making money on the side or earning a full-time income with multiple short-term projects rather than a single full-time job.
Gig Economy Growth
The gig economy workforce is snowballing, and that is because there are so many positives in areas such as remuneration, financial liberty, reduced anxiety, and flexible working conditions. A brodmin.com case study states:
“Global Gig Economy is expected to grow from $204 billion in 2018 to $455 billion in 2023, a Compound Annual Growth Rate (CAGR) of 17.4%. The number of freelance workers is steadily increasing in the Western World.
For example, the number of US freelancers is estimated to grow from 57 to 86 million by 2027, and the UK’s gig economy workforce more than doubled from 2016–2019 as it accounts for 4.7 million people.”
Transitioning into the Gig Employee Sector
One Washington Post article says, “36% of US workers participate in the so-called gig economy.”
People think they’d enjoy being their own boss, but how does one transition into it? Know how to handle your irregular income:
- You must have a disciplined budget. Gig workers have fluctuating incomes and must learn how to live off it when it hits highs or lows.
- Do not splurge on your good months. It’s tempting, but gig employees must understand that there will be flows of good and bad—learning the flows and preparing for the worst can help you successfully navigate this new working world. Splurging is probably the single biggest mistake gig workers make.
- Set up a tax account. If your taxes aren’t withheld, this is an absolute must for gig workers. Before tax season comes around, it is crucial to save money for income taxes (federal and state). Many states have quarterly tax payments. In addition, tax rates may be higher than for “regular” employees. Having money set aside for this will make your life much easier and stress-free.
- Plan for your retirement. As an independent contractor, you’re entirely responsible for planning your future. Consider establishing and regularly contributing to your own 401K or other retirement accounts. Retirement planning helps ensure a comfortable future while cutting down on taxable income.
Thanks for reading our blog—we hope we answered your questions about being a gig employee! Want to learn more about gig workers and how to be successful in the future of work?
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