The Gig Economy: What Is It?
The term “gig economy” refers to a wide range of independent or contract jobs.
The gig economy is described by the IRS as an “activity where people make revenue by delivering on-demand jobs, services, or items,” frequently through an app or website.
The phrase “gig economy” is most frequently used to describe jobs like driving for ridesharing services like Uber or Lyft. Making deliveries, or walking dogs. However, the gig economy encompasses almost every industry and accounts for a sizable portion of the labor force. According to a 2021 study conducted by Upwork, 59 million Americans freelanced in the preceding 12 months.
What Is a Gig Job?
It is not always simple to identify gig employment because it varies greatly. Examples that come to mind are renting a room on a short-term rental website, selling clothing online, driving for a ride-sharing service, and doing deliveries for Amazon Flex or another service.
Additionally, it covers occupations like freelancing as a writer, tutor, designer, caregiver, and many more. Gig work may be the perfect option for those wishing to work from home. Especially if they already have lucrative hobbies.
A “gig” is typically a brief work, project, or employment that a person takes on to earn extra money (sometimes referred to as a “side hustle”). However, many people undertake gig labor permanently or as their primary source of income. Some gig workers receive payment for each task or project. Some people get paid hourly.
What Do “Gig Workers” Do?
An independent contractor or freelancer who works in the gig economy is referred to as a gig worker. For tax purposes, gig workers are often categorized as self-employed rather than as employees. Because of this, they are not eligible for standard employment benefits like paid time off, retirement plans, or health insurance.
Knowing the Basics of the Gig Economy
Depending on the job, working in the gig economy may allow you to establish your hours, quick cash, or compensation. It may also indicate erratic income, a lack of perks, and challenging tax situations. Keep the following in mind while choosing gig work
Explore the PayCheck
Location, experience, and demand can all affect rates. Additionally, the platform you use to find gig employment may deduct a portion of your pay. Finding out how frequently you get paid is also a smart idea so you will know when to anticipate each payday. For more information, visit the business’ website, testimonials, and Better Business Bureau profile.
Be Mindful of Potential Expenses
Some jobs demand that you cover specific job-related costs. For instance, if you transport goods or people, you might be responsible for paying for insurance, gas, and automobile upkeep.
Plan for Taxes
Payroll taxes are typically routinely deducted from employee salaries by companies. On the other hand, the majority of gig workers are in charge of handling their math. Make self-employment tax a part of your budget to avoid a nasty surprise when it comes time to file.
Beware of Frauds
Demand for gig employment is rising, and con artists are aware of this. Watch out for warning signs. It’s probably a fraud if you’re requested to pay money upfront or if a job offer promises to pay more than your qualifications and experience merit. Contact us to find out more about how to recognize a fake job.