What are the drawbacks of being self-employed?
Despite the advantages, being self-employed is no bed of roses. Here are some of the major drawbacks. No job security. When you’re an employee, you must be paid as long as you have your job, even if your employer’s business is slow. This is not the case when you’re self-employed. If you don’t have business, you don’t make any money. You must pay self-employment taxes. Unlike employees who have half of their Social Security and Medicare taxes paid by their employers, self-employed people must pay their own Social Security and Medicare taxes. These are called self-employment taxes. The self-employment tax rate is 12.4% of an IC’s earnings up to the taxable limit for Social Security, and a 2.9% Medicare tax on all IC income. No employer-provided benefits. Although it is not required by law, employers usually provide their employees with health insurance, paid vacations and paid sick leave. More generous employers may also provide retirement benefits, bonuses and even employee profit shari
