What Is A Gig Worker? A Simple Explanation Anybody Can Understand

The gig economy revolutionized the way that people work.

With the rise of platforms like Uber and Airbnb, it has become easier than ever for people to find flexible jobs that fit their schedules.

If you have heard about the gig economy, some terms may be confusing due to how new they are.

You may also be wondering what the gig economy offers.

One of the most common new terms related to the gig economy is the gig worker.

So, what is a gig worker, and how is a gig worker different than other types of employment.

Keep reading to learn everything you need to know about gig workers, the traits of successful gig workers, and how you can take the leap and join the gig economy.

By the end of this article, you will be an expert on the gig economy and gig workers.

What Is a Gig Worker?

A gig worker, also known as a freelancer or independent contractor, is a person who works in the gig economy.

Gig workers work on short-term projects with various clients, often through online platforms like Upwork or Fiverr.

Unlike traditional employees, a single company or organization does not employ gig workers.

There are many different types of gig workers, including writers, designers, marketers, and developers.

Successful gig workers are typically talented, highly skilled professionals who can manage multiple clients and projects simultaneously.

In addition to having a specific skill set, successful gig workers have strong work ethics, time management skills, and a willingness to learn new things.

Is a Gig Worker Considered Employed?

To understand the question of what is a gig worker, you must understand the difference between being employed and being an employee.

A gig worker is employed but not considered an employee.

The two labels are similar but are pretty different in the business world.

Gig workers have jobs, so they cannot claim things like unemployment.

However, they are not considered employees of a specific company because they work independently as contractors.

Since gig workers are independent contractors and not employees, they cannot access benefits like health care, retirement, and paid time off.

Is a Gig Worker the Same as Self-Employed?

Some gig workers have considered self-employed, and other gig workers are not.

A self-employed gig worker has a specific skill set that they market to several companies or businesses.

For example, you can be a freelance copywriter, graphic designer, or developer.

A self-employed gig worker has more control over what they do and when they work.

The rules and regulations of a specific employer do not bind them.

However, self-employed workers often need to manage their finances, taxes, and business.

Gig workers that use apps like Lyft, Uber, and Doordash to pick up jobs are not considered self-employed because the entirety of their business comes from a single app or company.

These companies that focus on gig model are highly popular.

Unlike self-employed gig workers, these gig workers do not have control or ownership over what they do and when they work.

Traits of a Gig Worker

The gig economy is incredibly diverse, with many different types of gig workers.

However, successful gig workers share common traits that make them stand out.

This sometimes applies to contingent workers.

First and foremost, successful gig workers are highly skilled in what they do.

Whether you are a graphic designer, copywriter, or marketer, you need to be talented and have a strong work ethic to succeed in the gig economy.

In addition to having specific skills, successful gig workers are highly motivated and self-disciplined.

They are also willing to learn new things, take feedback, and adapt to changing circumstances.

Gig workers also have to manage their schedules and create their routines.

Since they work independently, they do not have the structure in their life that employees do, and it can be challenging to juggle all of your tasks and responsibilities.

To understand what is a gig worker, it is essential to remember that gig workers are not w-2 employees for any company.

As a result, they do not get tax documents from the company and are responsible for reporting their taxes.

As a result, companies can hire them as 1099 independent contractors.

How Many Gig Workers Are There?

More than 36% of American workers take part in the gig economy as a primary or secondary job.

The percentage translates to 59 million Americans.

Moreover, the gig economy is growing every day.

Projections show the number will rise even more as more workers explore the flexibility of independent work.

Types of Gig Workers

Gig workers come in different categories, as the section below discusses.

1. Freelance Work

A freelancer performs specialized labor such as graphic design, programming, and write-ups.

If you are a freelancer, you can provide services for which you have a background or education.

Some companies and clients refer to freelancers as contingent workers or contract workers.

You can always establish your business practice as a freelancer and grow into a big company.

This way, you’ll do more than just perform tasks for clients.

Besides the projects, you can also market, network, and do your back-end support.

2. Gig Economy Platform Work

The gig economy has various online platforms where you can get work.

Besides, the business sector has started to embrace remote work.

As a result, some traditional employers have opted to look for contractors on gig economy platforms.

Some businesses often need independent contractors or freelancers to handle specific tasks.

So instead of a full-time employee, the companies go to the gig economy platform to find a freelancer.

Typical working-class available in gig economy platforms include casual earners and free agents.

3. Self-Employed Work

If you are self-employed, you aren’t necessarily a gig worker or a freelancer.

But, since self-employment is self-directed, freelancers and gig workers are self-employed.

You can also operate a sole proprietor under your name as a freelancer unless you choose otherwise.

Self-employment comes with the need to pay the federal tax rate on earnings.

So, you can create a business structure around your business to protect yourself from liability.

You also lower your income if you pay yourself a salary.

So, in the long run, you reduce the tax burden you would otherwise bear if you filed taxes as a sole proprietor.

Examples of Gig Work

There are many different types of gig work.

Here are some of the most common examples.

All of them were impacted by Prop 22, also known as AB5.

Is Uber Gig Work?

Yes, Uber is a gig work app that allows you to become an independent contractor and pick up jobs.

Drivers can use the app to sign up and start working immediately.

As an Uber driver, you are responsible for your expenses and earnings, including paying taxes on what you earn.

Is Airbnb Gig Work?

Airbnb is a platform that connects hosts and guests.

As an Airbnb host, you can choose the space you are willing to rent, what type of space it is, what amenities you want to provide, and what your rate will be.

Many Airbnb hosts consider their business gig work because they are independent and run their businesses.

However, some Airbnb hosts prefer to see themselves as self-employed.

Is a Task from Upwork Gig Work?

If you are an independent contractor taking tasks from Upwork, that is considered gig work.

Since you work independently from any company and take tasks on an as-needed basis, you are considered a gig worker.

Upwork is one of the most popular places to find gigs.

Do Gig Workers Make Good Money?

How much you make as a gig worker depends on the task, effort, and intelligence you put in.

So, first, you must understand how to get the best paying jobs and when to work.

For instance, if you opt to do rider services, work at peak hours to maximize your income.

What Is the Highest Paying Gig Work?

You do not always get a specific gig work that constantly pays more than others.

An overlap occurs with top gigs, especially in the real estate and tech fields.

Nonetheless, one of the highest-paying gigs that could earn you a six-digit income is the purchase and sale of websites.

If you buy, fix, and sell a website, you could resell the site for 32 times the original price.

Do Gig Workers Pay Taxes?

All gig workers must pay taxes.

It is another one of the things you are responsible for.

You must calculate your earnings and losses and identify what you owe the government.

Many different tools and resources are available to help gig workers stay on top of their finances, including tax software that can make the process.

Do Gig Workers Get Benefits?

You don’t get employee benefits if you work in the gig economy.

Nonetheless, you can get certain benefits from a company or through a contract over time.

You could also become an employee of one company and remain an independent contractor of a different business.

The good news, plans are underway for some independent contractors who do gig work.

The aim is to arrange for portable, and many employers plan to become more mainstream for gig workers.

For example, Uber plans to support portable benefits.

So if policymakers can develop a favorable tax model, gig businesses will have a more stable foundation.

Do Gig Workers Get Health Insurance?

Employers consider you a contract employee if you work in a gig economy.

So, they’ll not always offer health insurance.

Nonetheless, you can buy self-employed health insurance from different companies.

Some typical coverage sources to consider are as follows.

Short-term Health Insurance

A short-term plan is an ideal option if you want a limited cover for a short period.

Then, you can save money to protect yourself with essential services.

Besides, with such a plan, you don’t need to pay a monthly premium for major coverage.

Individual Health Insurance

Also known as self-employed health insurance, individual health insurance only covers one person.

You’ll have to buy the cover during an open enrollment period.

Medical Insurance Packages

Medical insurance packages help you save on costs and still get quality coverage through various products.

Unfortunately, under the ACA, medical insurance packages don’t qualify as self-employed health insurance.

But, you can use the funds to pay dentists, hospitals, and doctors.

Qualified gig economy health insurance plans protect you from the ACA penalty for people who lack qualified coverage.

Do Gig Workers Get Paid Social Security?

The income from gigs counts towards your social security earnings.

Your average lifetime earnings depend on your total annual income, which includes traditional and gig jobs.

Your annual earnings for social security is the net profit from your schedule C.

Thus, if you deduce that particular money is a business expense, the said finances don’t count towards your social security record.

Are Gig Workers Eligible for Unemployment Insurance?

Gig workers were ineligible for unemployment insurance.

Nonetheless, congress authorized gig workers and freelancers to collect benefits under a new plan.

The new program — the Families First Coronavirus Response Act (FFCRA — was formulated during the covid-19 crisis.

Unfortunately, some rampant fraudulent unemployment insurance claims have increased during the pandemic.

So, as a gig worker, you must provide documentation of your earnings to get unemployment benefits.

How Do I Become a Gig Worker?

To become a successful gig worker, you must have strong skills, be motivated, and be self-disciplined.

It would be best if you also looked for opportunities in the gig economy that fit your skill set and interests to maximize your chances of success.

The best path is to identify a skill that you have and develop it.

Gig work is primarily skill-based.

How To Find Gig Work

You can use the internet and apps to find gig work.

Three ways to do so are to use marketplaces, find a company, or work with staffing agencies.

Gig Worker Marketplaces

Different technology-enabled platforms connect you with gig opportunities.

Digital marketplaces usually focus on particular industries or jobs.

So, you interact with clients and other gig workers on the market with legitimacy and transparency.

Gig Worker Companies

Also known as the sharing economy, gig worker companies consist of independent contractors who offer different services.

So, you can join a gig worker company to market yourself to clients.

Then, the clients who need your services can contact you when a gig is available.

Staffing Agencies

With staffing agencies, you work with a recruiter who identifies opportunities that fit your experience.

You’ll also have a coach who can guide you through the hiring process.

Recruiters understand the current rate for candidates with your skillset, so you won’t sell yourself short.

Frequently Asked Questions

These are some commonly asked questions about what a gig worker is.

Wrapping Up

Despite the few challenges, gig work is a popular career path.

The gigs are very rewarding if you put in the effort.

So whether you want a side hustle or a full-time worker, gig jobs are ideal.

Further, you don’t always need prior experience to get most freelance jobs. Instead, various jobs from different fields and industries are available to explore.

Finally, if you have more questions about the topic above, comment below and let us have a meaningful chat.