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What Is A Gig Worker? Definition, Types, Roles & More

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The gig economy grows daily, and many people have moved to gig work.

As a result, people with different skills can find clients quickly.

This topic is crucial because it signifies an evolution in the economy.

Business ways have changed, and now, many people prefer working remotely.

So, what is a gig worker, what do gig workers do, and what are the different job categories available?

Read on to find out.

What is a Gig Worker?

A gig worker is a contract worker that completes tasks or work on a freelance basis.

In short, they are a 1099 contractor and do not work directly for the company that is giving them the work.

There are many types of gig workers, but at the core, this principle remains throughout this line of work.

Why Do They Call It a Gig Worker?

The term gig described American jazz musicians’ performances in the early 1900s.

The musicians always performed in clubs and had flexibility but without employment benefits.

Since then, people have associated the term with people who work to receive payment on a project-by-project basis.

What Type of Job Is a Gig?

A gig is a post that lasts for a specific period.

Often, the task lasts for as long as a project is in progress.

Writing, software development, and project management are common gig job examples.

Why Is It Called the Gig Economy?

The gig economy goes by the said term because contract workers take freelance jobs on demand.

Besides, as a freelancer, you often work several jobs at once.

Some freelance jobs are also known as gigs, hence the ” gig economy.”

About Gig Worker Classifications

There are several different types of gig workers, and it’s important to know about each one.

Are Gig Workers Independent Contractors or Employees?

Based on the IRS, gig workers fall in the same class as independent contractors.

These two categories of workers always receive payment hourly or project-based.

But, contrary to employees, independent contractors and gig workers who receive more than $600 get 1099 NEC forms.

Is a Gig Worker The Same as Self-Employed?

If you do gig work, then you are self-employed.

So, you must pay the estimated tax amount to the IRS. Failure to pay your dues sets you up for a penalty.

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 Economy Jobs

Top gig economy jobs include rideshare drivers, developers, and freelance contractors.

1. Rideshare Drivers

If you can access a car or motorcycle, you can transport people whenever you are free.

To start, register as a rider or driver on various apps.

After approval, you’ll access different variables like tips and bus fare.

Top rideshare apps include Uber, Lyft, HopSkipDrive, and Via.

2. Developers

As businesses go digital, high demand for software to support digital platforms emerges.

Besides, companies often need website developers, graphic designers, etc., for short-term IT projects.

So, if you are tech-savvy, development is a lucrative gig to consider.

You can market your services to companies with technological needs without an IT department.

3. Freelance Contractors

Clients and businesses use the gig economy to connect to freelance talent.

So, you can apply for gigs that fill the skill gaps to help companies to scale up for a short period.

For instance, you can develop Minecraft or write user-specific poems for interested parties.

The above are a few notable examples of gig economy jobs.

Nonetheless, many other jobs, such as tutors, editors, and transcribers, are available in the gig economy.

Related: The best gig jobs to apply for

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.

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?

You must report the finances you earn from a gig economy on your tax returns.

If you are an employee gig worker, your employer deducts tax from your paycheck.

Also, if you are an independent contractor, you have to pay an estimated tax amount.

Do Gig Workers Get a W2?

W-2 tax forms are for employers, but gig workers receive a 1099 NEC form during tax season.

Besides, a gig worker pays self-employment taxes to the Internal Revenue Service.

Pros and Cons of the Big Economy

Like any other industry, the gig economy has ups and downs.

Pros of the Gig Economy

The gig economy has many benefits, but the top three are as follows.

1. Flexibility

As a gig worker, you choose where and when you work.

You also determine the clients you take and those you don’t.

Sometimes, you set your rates and decide to work only at night or on weekends.

2. Low Entrance Barriers

You don’t need previous work experience to join the gig economy.

You can find many simple jobs to perform online.

Besides, clients list the services required on the internet or apps.

So, you choose what you’re able to do.

3. Independence

As a gig worker, you are your boss.

So, you don’t have to progress reviews, attend meetings, or go to the office.

Cons of the Gig Economy

Unfortunately, every job has drawbacks.

Here are three disadvantages of the gig economy.

1. Inconsistent Income

Gig workers have limited to no control over how many tasks to perform in a given period.

You won’t get any money if no one has a project for you.

2. Lack of Benefits

You don’t have an employer to provide benefits.

So you are responsible for your retirement plan, health insurance, etc.

3. Taxes and Expenses

You should manage and pay taxes on the finances you earn from gig work.

Besides, you must buy and maintain the necessary tools and equipment based on your tasks.

For instance, you may need a smartphone, computer, or car to perform the jobs.

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.

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.

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