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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Almost no one can stop earning money altogether, but a traditional job with a fixed employer, a regular paycheck and a set schedule is only one way to do it. The real choice is usually between working for someone else on a salary or wage and working for yourself, selling your services or products to clients. The second option can bring more control over your time and work, but it also shifts risk onto you. This article explains how the U.S. government defines self-employment, where it is most common, and what the trade-offs look like before you decide.
What “a job” actually means here
In everyday speech, a job usually means a position on someone else’s payroll. You receive a wage or salary, your employer withholds payroll taxes, and your income arrives on a predictable schedule. Earning a living without that arrangement typically takes one of two forms:
- Self-employment: you run your own business, profession, trade or farm and earn money from its activity.
- Independent contracting: you perform work for clients as an outside contractor rather than as an employee, often on a project or per-task basis.
Both can replace a traditional job, and both are different from having no income at all. Many people also combine them, holding a salaried role while doing freelance work on the side.
How the Bureau of Labor Statistics defines self-employment
The U.S. Bureau of Labor Statistics (BLS) defines self-employed workers as people who work for profit or fees in their own business, profession, trade or farm. The definition covers people whose business produces no profit or a loss, so self-employment is not the same as earning money from it. If your venture loses money, you are still classed as self-employed, and you still carry the costs.
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For the government’s classification scheme, the BLS “Class of worker” documentation describes how Current Population Survey respondents are categorized. The government counts a person by the arrangement they describe for their main work, so the same person can appear differently in different surveys.
Where self-employment is common
Self-employment is not spread evenly across the economy. It is concentrated in certain occupations, and those patterns change over time. In a February 2024 Career Outlook article, BLS economists Nicholas Hale and Ryan Farrell examined fast-growing occupations with high rates of self-employment. In each occupation on their list, at least half of workers were self-employed in 2022. The table below shows three of the examples, with BLS projections for 2022 to 2032.
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| Occupation | Share self-employed, 2022 | Projected employment growth, 2022–2032 |
|---|---|---|
| Taxi drivers | 92% | 21% |
| Barbers | 79% | 7% |
| Fine artists (including painters, sculptors and illustrators) | 59% | 5% |
Two qualifications matter here. First, the growth figures are BLS projections for all workers in each occupation, not only the self-employed, so they do not show that self-employment caused the growth. Second, the shares describe 2022 and the projections were published in 2024. Check the BLS occupational outlook for newer figures before relying on them.
BLS also lists other examples from the same group: animal trainers, exercise physiologists, special effects artists and animators, and art directors. These are illustrations of where self-employment is common, not a promise of earnings or a recommendation for any reader.
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How many people work as independent contractors
The broader picture comes from BLS’s contingent and alternative employment survey. In July 2023, about 11.9 million people were independent contractors on their sole or main job, which BLS put at 7.4% of total employment. That figure covers one specific arrangement in one month, as measured in that survey. It does not count every self-employed person, and it does not include people who freelance on the side of a salaried job. Results from the November 2024 release are the most recent figures in this series that were available when this article was written.
The trade-offs
BLS puts the central trade-off in one sentence. In Hale and Farrell’s words: “Self-employment may offer increased flexibility and independence for workers. Keep in mind, however, that it may also mean long hours and increased financial risk.” That summary is useful because it names both sides without promising either outcome. In practice, the trade-offs break down like this:
- Control over time and work: you can often choose when, where and which projects you take. The catch is that no one else is scheduling your income, so you have to generate the work.
- Income predictability: a salary arrives on a schedule. Self-employed income varies with demand, seasons, and how many clients you have, and it may be unpaid when a client is late.
- Financial risk: you pay your own business costs, and in a loss year you still face those costs. Self-employed people also handle their own tax payments, retirement savings and health coverage, which employers often share in a traditional job.
- Customers: you must find, keep and serve clients. A salaried worker’s employer handles much of that work.
- Hours: the flexibility is real, but many self-employed workers work longer hours, especially in the early years.
The BLS material supports the flexibility and long-hours points directly. It does not quantify income volatility or other financial comparisons, so treat those as questions to test against your own numbers.
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Before you give up a paycheck, work through these questions in order. Each one exposes a risk that the headline examples can hide.
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- Check the occupation’s actual duties and training. Look up the role in the BLS Occupational Outlook Handbook for typical duties, education and pay, and check whether the occupation’s self-employment rate matches the kind of work you would do.
- Read the projections with care. BLS describes its employment projections as uncertain and says they should inform a career choice, not determine it. A strong projection does not guarantee demand for your particular services.
- Measure your runway. Calculate how many months of essential expenses you can cover with savings if income falls to zero or drops sharply. Irregular income usually requires a larger cushion than a salary does.
- Set aside tax money from day one. Self-employed workers generally pay both halves of Social Security and Medicare taxes and make their own estimated payments. Confirm the rules for your country, state and business structure with a tax professional.
- Plan health coverage and retirement saving. Find out what you will pay for insurance and how you will fund retirement without an employer contribution.
- Test demand before resigning. Take a few paid clients or projects while still employed. If you cannot find them, the trade-off is clearer than any statistic.
Who should be cautious
Self-employment suits some people better than others. It is a harder fit if you need a fixed income to meet large debt payments, if you have dependents and no savings cushion, or if your field depends heavily on one employer. Some people do better keeping a salaried job and building a side business until its income is steady. Neither path is automatically better, and the evidence shows only that both exist and carry different risks.
Where the data stops
The figures in this article come from BLS releases published in 2024, covering 2022 and 2023 data. Occupational shares change, and newer releases may differ. The statistics describe averages across each group and cannot predict what a given person will earn. Use them to frame your questions, then check current BLS data and your own financial situation before making a decision.
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