According to Emmy Lou V. Delfin, program manager of ICT Office’s e-Innovation Group, there are more than one million online-based freelancers in the country as of 2015.
While there is the continuous increase in the number of freelancers in the country, there are still some people who are afraid of switching from full-time employment because of financial hear says that they get about freelancing.
Here are five of these financial myths and what are the actual facts related to them:
You can opt to not declare your income at the BIR which makes it free from tax.
Some people think that working as a freelancer entitles them to not register at the BIR because the foreign employers do not transact with the BIR themselves. This is not true because as employees living in the Philippines, you need to pay income taxes even if you are self-employed as this is stated in Chapter 2 of the National Internal Revenue Code of 1997.
Filing your income taxes spares you from paying penalty fees as well. Here is a helpful guide for filing your income taxes by April 15.
You can take as many jobs as you can when freelancing so you’ll make more money.
There have been many testimonials in the press that freelancing can give you a larger income (with as big as Php1,500,00 in a year) because the potential of acquiring clients are limitless. Bear in mind that while this is true, producing quality work for your existing clients is a must for them to get your services again or give you referrals based on the great work you delivered.
Acquiring more clients than you can handle can make you fall into the trap of spreading yourself thin and producing subpar work for all of your clients instead on focusing on a few and delivering great output. Fewer clients do not mean smaller income, too. Setting your rate cards on the amount that you think you deserve and justifying your charges can also lead to more income.
You can get simply use the timer on your phone for each work task and record them so you’ll know how much is your capacity per day. This is when you can determine how many clients you can accommodate simultaneously.
You will always have unstable income when freelancing.
Many would think that clients can suddenly disappear and can leave freelancers hanging on what job to get next. Some would also assume that most clients only hire freelancers for short-term projects.
While the majority of the online employers do look for short-term projects, there are many employers looking for full-time remote employees online. This means you can get a stable income for a long time depending on your arrangement.
In Episode 86 of Freelance Blend with John Jonas of OnlineJobs.ph, John mentioned that the roster of employers at his website is looking for long-term employees. You can also find other portals in the Freelance Blend Resource Page for potential long-term engagements.
You have fewer career growth outlets which mean the income level is hard to increase.
So if you’re not working for a corporation where a boss can determine when you’re up for a promotion and salary increase, how will you get a pay raise?
The difference between full-time work and freelance work is that you’ll be the one to call the shots. You can map out your target income annually and target job titles. In some instances, you may not have a change in job title but you can find higher-paying clients.
You will have fewer expenses because you will work at home or nearby your house.
Fewer commutes or drives and lunch outs may lead you to think that freelancing means less expense from your end but have you ever thought of…
- The additional electricity consumption because you are now working at home – depends on equipment consumption but can start at Php500 / month when using your laptop frequently
- Increased coffee shop expenses since you’ll be going out for meetings with local clients or working there when you feel more productive outside of your home – Php150 / cup which can go accumulate up to Php1,200 / month
- More internet expenses since you need to have back-ups (phone tether – Php50 / day for 3G internet, broadband stick – Php 1,500 for device and Php 50/ day load, internet connection at restaurant or coffee shop – Php150 for one meal / coffee) when your internet connection at home goes down
- Freelance marketing expenses such as FB ads – starts at Php500 / week, website hosting and domain – starts at Php 700 / year, or calling card printing – Php250 / 100 pcs
What you can do about this is set a freelancing fund that you replenish using your salary and do not cover these with your personal money. This way, you can integrate this costs when you are computing for your freelance rates and not come short of funds.
Know any other freelancing financial myths? Share them with us in the comments section below.