4 Things You Need to Know for Gig Workers

You! Uncovered - The gig economy describes a variety of freelance or independent contract work.

What is meant by the GIG Economy?

The IRS defines the gig economy as "an activity in which people earn a living by providing jobs, services, or goods on demand," often through apps or websites. This area of the job market comprises temporary, contract, and freelance work.

The term "gig economy" is most often used to refer to jobs such as working with a ridesharing company, such as Uber or Lyft, making deliveries, or being a sniffer dog. However, the gig economy covers almost all industries and represents a large part of the workforce. A 2021 survey conducted by Upwork found that 59 million Americans had freelanced in the previous 12 months.

What is GIG Work?

GIG Work varies widely, so it's not always easy to define. Common examples include renting out a room on a short-term rental site, selling clothes online, driving for a ride-sharing company, and making deliveries for Amazon Flex or other services. This also includes jobs such as freelance writing, tutoring, design, parenting, and more. If you want to work from home, GIG WORK might be the right choice, especially if you already have a hobby that makes you money.

A "GIG" (sometimes called a "side job") is generally an assignment, project, or short-term job that someone does to make extra money. But many also do GIG WORK for the long term or as their main source of income. Some freelancers are paid per task or job. Others get paid by the hour.

What is meant by a GIG worker?

A GIG worker is someone who works in the gig economy as an independent contractor or freelancer. Freelancers are usually classified as self-employed, not employees, for tax purposes. For this reason, they do not receive the usual 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 provide flexible hours, fast cash, or the ability to set your own salary, depending on the job. However, it can also mean irregular income, lack of benefits, and complicated taxes. If you're considering a gig job, keep the following in mind:

Research the pay

Rates may vary based on location, experience, and request. In addition, the platforms you get gigs on may take a toll on your income. It's also a good idea to find out how often you're getting paid, so you'll know when to expect each paycheck. Check the company's website, reviews, and the Better Business Bureau page for details.

Be aware of potential costs

Some jobs require you to pay certain work-related fees. For example, you may have to pay for insurance, gas, and car maintenance if you transport goods or people.

Budget for taxes

Usually, employees automatically get payroll taxes withheld by their employer. Instead, most freelancers are responsible for calculating it themselves. Work self-employment taxes into your budget so you don't face a surprise bill when it's time to file.

Be wary of scams

Gig work is in high demand - and hustlers know it. Watch for signs of danger. If you are asked to pay money upfront, or a position promises a higher salary than your skills and experience guarantee, it is most likely a scam. Learn more about how to spot fake jobs.

If you're interested in starting remote work, you can learn more tips and opportunities in our work-from-home guide.

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