What is a freelancer?

 What is a freelancer?

 What is a freelancer?

A freelancer is a contractor who receives compensation for individual work without being permanently or temporarily employed by an employer. 

As a general rule: If you are employed, you are not a freelancer. The word freelancer comes from English "freelance" and refers to mercenaries or knights ("freelance") who took assignments for the highest paying. 

There are not many mercenaries who call themselves freelancers today, so some examples of typical freelance professions are journalists, actors, photographers, cartoonists, musicians, translators, and consultants - although none of these necessarily have to be freelance-based.

It can be a bit complicated to understand, but a freelancer can receive compensation both as salary through an employer's salary system, or they can send an invoice to the upgrader and receive payment in this way. Both parts can be defined as freelance work, depending on several factors.

What are the characteristics of a freelancer?

When the tax authorities and NAV assess whether someone is a freelancer or an employee, it is added, among other things. emphasis on the following:

• Are the assignments limited in scope and time?
• Is the person taking the assignment subject to the employer's authority?
• Is the assignment performed at the employee's own expense and risk? 
• Can all or part of the assignment be delegated further by the person taking on the assignment?
• Does the person take on the assignment use their tools, implements, and materials?
• Does the contractor carry out assignments for several clients or just one?
• Does the remuneration cover both the expenses and the profit the client must have?

Note that the Tax Administration does not operate with the term freelancer, they use either a wage earner or a self-employed person. A freelancer can be both! 

NAV can, on the other hand, use the word freelancer when it comes to a person's social rights, e.g. in connection with compensation from the National Insurance Scheme.

Difference between paid freelancer and self-employed freelancer

If you as a freelancer get paid in salary, this triggers more rights and other obligations than if you get paid by sending an invoice to the client. 

If the employer pays you and delivers a-melding for you, you also do not need an organization number to invoice from and you do not need to keep accounts or pay VAT. In addition, you only submit a regular tax return as all other wage earners do.

If your invoice for assignments, is the opposite, then many choose to start a sole proprietorship. Then they have to keep accounts, usually pay VAT, and submit a business statement in addition to the tax return.

How does a freelancer pay taxes?

The type of tax freelancer pays will depend on whether they receive a salary or invoice for assignments. If they receive a salary, the tax will be deducted from the employer's salary on a tax card. If the freelancer runs an ENK, they will have to pay advance tax.

Social rights

Freelancers generally have fewer social rights than regular employees. The client is not responsible for paying sickness benefits, so only after 16 days (what would normally be the employer period for sickness benefits) can you receive sickness benefits from NAV. 

Only freelancers who receive a salary build up holiday pay throughout the year. Freelancers must also take out their occupational injury insurance to receive this type of compensation in the event of an accident. They must also take out their pension.