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4 Things To Know for Gig Workers

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Some gigs require you to pay for certain expenses related to the job. For example, you may be on the hook for insurance, gas and car maintenance if you transport goods or people.

gig worker is someone who works within the gig economy as an independent contractor or freelancer. Gig workers are typically classified as self-employed, rather than employees, for tax purposes. For this reason, they don’t receive regular employee benefits such as health insurance, retirement plans or paid time off.

What to know about working in the gig economy

Working in the gig economy can come with flexible hours, quick cash or the ability to set your own pay, depending on the job. However, it can also mean irregular income, a lack of benefits, and complicated taxes. If you’re considering gig work, keep a few things in mind:

Research the pay

Rates can vary by location, experience and demand. Plus, the platform you get gig work through may take a cut of your earnings. It’s also a good idea to find out how often you get paid, so you’ll know when to expect each paycheck. Check the company’s website, reviews and Better Business Bureau page for details.

Be aware of potential costs

Some gigs require you to pay for certain expenses related to the job. For example, you may be on the hook for insurance, gas and car maintenance if you transport goods or people.

Budget for taxes

Traditionally, employees automatically get payroll taxes withheld by their employers. Most gig workers, on the other hand, are responsible for doing the math themselves. Build self-employment tax into your budget so you don’t face a surprise bill when it’s time to file.

Watch for scams

Gig work is high in demand — and scammers know this. Be on the lookout for red flags. If you’re asked to pay money upfront, or a position promises to pay more than your skills and experience warrant, it’s probably a scam. Learn more about how to spot a bogus job.

If you’re interested in starting a remote gig, you can learn about more tips and opportunities in our work from home guide.

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