What is Freelancing?
One of the pros of freelancing is having more flexibility in scheduling their hours and choosing the projects they want to work on than regular workers. But what exactly is freelancing? Freelance is a form of work in which a professional works on a per-job or per-project basis as an independent contractor. In Singapore, they are also known as ‘self-employed persons’ or ‘own account workers’.
The gig economy had risen when the pandemic hit, which was no different in Singapore. In a survey conducted by the Ministry of Manpower, individuals who held more than one job increased to 6.7% in 2020. Interestingly, the employment rate reached a higher rate of 67.5% for 2022, surpassing 2019.
With the prices rising nowadays, having more than one job may be something that can help your finances — but is it worth doing?
The Pros of Freelancing
Freelancing in Singapore is becoming increasingly popular as more and more people are looking to supplement their income or pursue a career in something they are passionate about. To help them, there are many different online platforms made specifically for freelancers to help them find jobs faster. Here are some of them:
Many different co-working spaces have also popped up in the country, which freelancers can use as either their office away from home or a place to collaborate with fellow freelancers.
Freelancing can open many doors for individuals willing to take a side job and put in the extra hours.
If you’re still on the fence about freelancing in Singapore, we’ve listed down some of the benefits of freelancing:
1. Flexible working hours. Freelancing in Singapore allows you to choose when and where you work. You can choose your own work hours and schedule, allowing you to fit work around other commitments such as family, studies, or other employment.
2. Saves money. Freelancing can be a great way to save money as you will not have to pay for office space or equipment. You can also save on hiring staff as you can complete the projects yourself.
3. Increased Earnings. Freelancing can allow you to earn more than a traditional job. On the internet, you can bid for jobs at whatever rate you choose, at your convenience. With freelancing, you can set your hours and increase your earnings by taking on multiple projects simultaneously. Additionally, you may have access to a wider variety of work, providing more opportunities for growth and higher potential earnings!
4. Independence & Freedom. You are in charge when you work for yourself. You can choose the projects you want to work on and how you want to do them. Every detail of how you manage things — including your workload, scheduling, dress code, and other decisions — is up to you. As a freelancer, you can live wherever and perhaps even travel while working.
5. High Career Growth & Opportunities. The more projects you take in, the more people you meet. The connections you build throughout your freelancing stint can be a great asset you can leverage for higher rates and even justify transforming this gig into a full-on business.
The Cons of Freelancing
While the previously mentioned pros of freelancing may sound great for some individuals, one should consider the following downsides before considering doing freelance work:
1. Income may be unstable. One of the biggest cons of freelancing in Singapore is the unreliable income. As a freelancer, you do not have the security of having a regular, consistent pay cheque. Your income depends on whether you have a client and when they will be paying you. There will be months when you make a lot of money, while there will be months you make almost nothing. Your finances will take a hit if you don’t have a different sideline or a regular job that can help weather your dry months.
Before completely committing to your chosen freelance work, people start this as a sideline. Once you have established a relatively consistent cash flow and saved enough, you can consider freelancing full-time.
2. CPF Contributions will have to be voluntary. CPF Contributions will have to be voluntary. The Central Provident Fund (CPF) is a mandatory savings scheme in Singapore administered by the Central Provident Fund Board (CPFB). The CPF is used primarily for retirement savings, housing purchases, and healthcare expenses. Typically, those with regular corporate jobs have their contributions automatically deposited into this fund by their employers. Freelancers don’t get to enjoy this.
If a freelancer wants to join the CPF, they must make voluntary contributions to their three CPF accounts. Thankfully, a CPF contribution calculator is available online to help voluntary contributors calculate how much they would need to put in.
3. Inconsistent pay rates. Freelancers may advertise their fixed rates online, but if you’re still starting and don’t have that many references or connections, you would have to adjust your rates per client based on their needs. There will be times when the agreed rates would be a bit too low, but since you are still starting, you wouldn’t have the leverage and bargaining power that other more tenured freelancers have.
4. Needs a high level of self-management skills. Since you would be your own boss as a freelancer, you would need impeccable self-management skills. From managing deadlines to ensuring your finances are sorted, freelancers must take care of these things if they want this freelancing in Singapore stint to succeed.
5. No benefits or medical leaves. Most of the time, independent contractors are not entitled to job benefits like health insurance. Most regular salaried employees have access to group insurance through their company. Freelancers do not get this benefit because they are not paid as employees by a corporation. You would need to get your own health insurance and set up your own fund for retirement.
Is Freelance Work Right for You?
Whether or not to pursue freelancing in Singapore will ultimately depend on your circumstances, objectives, and preferences. You should thoroughly consider all the benefits and drawbacks of freelancing before making a choice. Ultimately, it’s critical to consider both the advantages and disadvantages before choosing whether freelancing is the correct choice for you.
When should I expand?
As a freelance worker in Singapore, there are many opportunities to succeed. From finding the right clients to setting up your own business, it is essential to understand both the pros and cons of being a freelancer to make the most out of your career. With the right strategies and mindset, you can do freelancing full-time or open up your own business.
When you’ve reached the chance to develop your freelancing in Singapore into a full-on business endeavour, you might want to consider incorporating your business to protect yourself and your company. Incorporation also comes with benefits that your business can enjoy. To learn more about this, check out the blog article on the 5 reasons why you should incorporate your business.
In Lanturn’s article, learn the essentials of company incorporation in Singapore. Get answers to your questions on business registration in Singapore and more.
Launch with Lanturn
Do you want to take the next step in converting your side gig into a real business but are hesitating because of the price? Don’t worry! Incorporation is less expensive and is easier than you imagined if you do it through our Launch with Lanturn programme. Lanturn created this service plan to assist first-time business owners like you in lowering some of the startup costs.
After years of helping local and foreign business owners launch their enterprises in Singapore, “Launch with Lanturn” was established to assist motivated business entrepreneurs in starting new ventures. In addition, Lanturn guarantees quick and efficient incorporation without breaking the bank. You can save money on rent and registration fees while still getting competent corporate secretarial services from Lanturn if you can take advantage of this package.
These are the features of this cost-effective programme:
- Affordable Incorporation fees
- A Registered Business Address for the first year with Lanturn
- Professional Preparation and Maintenance of Registers
- Corporate Secretary Services for the first year care of Lanturn
- Corporate Secretary Services for the first year care of Lanturn