There are so many benefits that come hand in hand with being an employee. You have contracted hours, so know how much money you will be bringing in on a monthly basis. You don’t have to worry about taking time off to recover from illness or injury, as you will receive sick pay, allowing you to recover without worrying about financial instability. You are likely to be entitled to parental leave. You also receive annual leave, so you can enjoy a little time away from the workplace each year. However, an increasing number of people are opting to pursue a self-employed lifestyle. Being self-employed means that you are your own boss. You can decide what hours you work, where you work, and what direction your career takes. You also make yourself rich instead of other people building their dreams and making major profits off your back. Now, when you are self-employed, you take on full responsibility over yourself and you are also exposed to particular threats or problems that employees may be oblivious. Let’s take a moment to look at a few different areas that will change when you make the switch to being self-employed!
Managing Your Finances
Everyone has to manage their finances. But when you become self-employed, you have to take on even more responsibility over your own money. Why? Well, when you work in an employed position, your employer ensures that your taxes and other legal contributions are automatically deducted from your pay. You don’t have to consider paying them yourself. Instead, you just receive your wages in your bank account and how you spend them is up to you. When you are self-employed, you have to ensure that you deduct your taxes and other necessary costs from the money that you earn. If you fail to do this, you will get to the end of the tax year, will complete your tax return, and find that you have huge amounts of outstanding money that you can’t get together in time for payment. You will then receive all sorts of late payment fees and fines. If you don’t pay up at all, you could face serious legal action. If you find yourself in this predicament, feel free to contact McCarthy Law PLC. They will be able to give you any advice that you need.
Opening Up a Business Account
One of the easiest ways to organise your finances when you are self-employed is to separate the money that you use for your business and your personal money. This will allow you to know how much you have available to spend on business and what you have to spend on personal items. The best way to separate your finances is to open up a business bank account alongside your personal bank account. They will generally work in similar ways, but you will just benefit from a little organisation.
Paying Your Taxes
Paying taxes can be an extremely complex process, especially if you start deciding to expense particular business costs. The easiest and most secure way of completing your taxes is to engage with a professional accountant. They will be able to complete your tax return at the end of each fiscal year on your behalf. You can also benefit from their services in other ways – they can take a look at your spending habits and suggest areas where you might want to cut spending and areas that could be lucrative if you invest in them further.
Taking Out Insurance Policies
When you are self-employed, you are responsible for all of your own equipment. If a laptop, tablet, or smartphone breaks or is lost or stolen, you’re the one who’s going to have to fork out for repairs and replacements. This can be costly, but necessary, as you may need these things to be able to complete your business tasks effectively. A good idea is to take out insurance policies that will cover expensive items used for work. This means that if anything happens, they will be repaired or replaced quickly and you will only have to pay for an excess.
Write Up Contracts
If you enter into any deal with a client, customer, or other individual, it’s important to write up some sort of contract. This will ensure that everyone sticks to their end of the deal – whether it’s a contract for a financing or payment plan for your products or a contract regarding supplying and manufacturing. If someone doesn’t stick to the contract, you can then take legal action more easily with higher chances of success too!
These are just a few different steps that you can take to protect yourself when you are self-employed. It is generally best to implement them into your business practice as soon as possible. This means that you will prevent problems from occurring in the first place, or that you can take steps to rectify issues that do manage to establish themselves.