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Working Online: Difference Between Remote Corporate Employee vs. Virtual Contractor

working online remote corporate employee virtual contractor

2 Types of Online Work:

A lot of you ask if the online jobs we post in our free Facebook group are traditional remote employee jobs or contract positions.

The general sense we get from you is that you think being a contractor or “freelancer” is somehow less stable or desirable than being an employee, which is just simply not true.

I want to clarify what each type of role entails and the amazing vs. not amazing parts of each so you can decide for yourself what is best for you.

A Remote Corporate Employee

When you are a remote employee of someone or a company, you are going to be working for them generally full time or part time as a traditional employee.

This means they will deduct and pay taxes on your behalf, offer benefits like retirement savings plans, health insurance and paid vacation time.

They’ll send you everything for your home office setup like a laptop, software and sometimes even a stipend for a desk setup of your choice!

Pay for these kinds of remote corporate roles are equal to what you’d make living in the companies location (for the most part).

Therefore, you don’t have to worry about taking any kind of a cut just to shift into remote work if you are qualified for corporate roles.

Although this sounds perfect for almost everyone there are still some definite drawbacks. 

You will have traditional working hours and be expected to be online and at your desk during this time.

Even though you are online you will still have a boss to report to and a lengthy process for getting any raise or promotion.

Paid time off will be equal to what you get in your home country. So between your working hours, traveling a lot OR to time zones too far off from your company’s required hours, it may be out of the question entirely.

Even if you end up being able to move or travel somewhere way cheaper vs traditional living expenses if you were to work at the company’s physical location you will still have taxes taken out from the home country.

A Virtual Contractor / Freelancer

Taxes and Expenses

A virtual contractor can also have a steady part-time or full-time company or client workload.

Instead of being auto-deposited a paycheck every 2 weeks with taxes already deducted, the contractor sends an invoice and receive payment however they desire.

Examples are a credit card or bank transfer, see our free Freshbooks trial to help you get started with this, HERE for more details.

They do not have taxes already deducted and if they aren’t working in their home countries and choose to travel full time or base in various countries for a month at a time or something…they are actually usually entirely tax exempt on foreign earned income.

This depends on your country and sometimes does require some special paperwork to ensure you are 100% legal but it’s normal to not be taxed in your home country if you aren’t living there.

You can also expense all your working costs such as:

  • office setup (square footage of your home office space is actually already a huge deduction on its own),
  • laptop
  • software
  • travel costs
  • co-working space
  • meals on the go
  • childcare
  • online courses
  • books to help you, etc.

An ‘expense’ means if you do owe any taxes at the end of the quarter you can show what expenses you had and will not be taxed on that amount. Traditional employees are not able to do this, only if you are a contractor or freelancer.

Choose Your Lifestyle

It also means you do not have a boss, if you do not like a person you are working with then you just stop working with them.

You do not have to apply for paid time off or only have a few weeks per year, you have as much time off that you want!

You just have to ensure you have enough money to cover the time off you want to take or just schedule work around the days you want off.

There are lots of ways to help with this like saving all the money you’d normally be taxed on.

Having a backup virtual work friend cover for you for 2 weeks and give her half of what you’d charge the client.

You can also just take off a Friday + Monday and the weekend and get all your work done the other days.

Since you have to pay all your own taxes, laptop, software. You also usually charge quite a bit more per hour, project or month then you’d be paid at a traditional company.

If you’d normally make $30/hr after taxes in a company then as a contractor you can charge $50-$60/hr and give yourself a raise whenever you want.

If you track your expenses properly then you won’t be struggling over taxes either. You can often end up making significantly more than if you were an employee (even with all the benefits they try to distract you with).

Online Work Freedom 

Sound too good to be true? It’s not.

Working online means FREEDOM but can come with handcuffs of a different kind when you decide to stick with the remote employee route.

For some with a lot of medical issues or a big family then having company medical coverage makes way more sense for them. Others want to travel so being a contractor is the only way to go.

It’s important to remember that NEITHER mean stability. You can be fired tomorrow from a job in an office, remote corporate job or a long-term online contract client.

You need to realize your money is up to you and you control how you make money online.

For instance, how many clients, how to get work whenever ASAP, multiple streams of income, etc. then the sooner working online will feel like true freedom.

If you are ready to join the work from anywhere revolution now then join my next free class about how to work online as a virtual assistant today! I firmly believe it is the BEST way to start making great money online quickly.

You can enroll by clicking here! Easy!

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