What Are the Benefits of Being a 1099 Worker?

by Linda Ray
You can work at your own pace as a freelancer.

You can work at your own pace as a freelancer.

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People who work under 1099 status are considered independent contractors. In general, 1099 workers are not entitled to employer-paid benefits such as health insurance, unemployment benefits or Social Security contributions and they are not guaranteed certain hours or amounts of work by their employers. On the other hand, 1099 workers have more flexibility, as they can have contracts with multiple partners and can determine their own methods for completing work, scheduling and managing their finances.

Price Setting

Independent contractors are free to negotiate on the price they charge per hour, per piece or per project. Although you can work hourly, independent contractors primarily price work by the job. In many cases, you can get a higher rate of pay for the same type of work performed by employees, or W-2 workers, because you have to take full responsibility for getting the job done. And 1099 workers can often charge higher hourly rates for their work since their employers don't have to worry about some of the extra costs incurred when they hire employees directly, such as benefits and overtime.

Scheduling

As an independent 1099 worker, you generally are free to make your own schedule. While deadlines and requirements exist for every job, you are free to work whatever hours you want to meet your contractual requirements. No one is telling you that you need to start work early in the morning or work five days a week to get a job done. If you can do 40 hours’ worth of work in one 15-hour day, you can bill for 40 hours if you're being paid by the project, as long as the job is done adequately. This type of schedule flexibility gives you a lot of freedom to schedule work to suit your lifestyle.

Independent Method

Independent contractors are free to use any method they choose to get their work done, as long as it is done according to the agreement made with the primary contractor. This is a sharp contrast to workplaces where procedure is normally standardized and enforced and employees are constrained by available resources. As an independent contractor, you might beat the competition just by having the highest quality equipment in the area or by subcontracting out to other workers, a common practice for 1099 workers, who essentially are self-employed. You also can deduct operational costs from your taxes.

Flexibility

In some ways, being an independent contractor seems like a risky proposition, as there is never a guarantee you will be able to find work. On the other hand, you always have the opportunity to work if you possess skills that are in demand. In general, being a 1099 worker gives you a type of flexibility that can keep you working even when the economy is unstable. For an independent contractor, even if your field gets decimated by the economy, you can get creative and branch out into similar fields. You have no long-term obligation to anyone, so you don't have to work for anyone you don't like. You can use networking to build a base of loyal customers.

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

Photo Credits

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