A freelancer is a self-employed individual who offers services to clients on a project or contract basis rather than working as an employee. Freelancers can work with multiple clients at once, set their own schedules, and typically operate as independent contractors.
What is a Freelancer?
Freelancers run their own businesses and are responsible for finding clients, setting rates, and managing their workload. They can provide a wide range of services, from creative work such as graphic design, writing, and marketing, to technical fields like software development, consulting, and accounting.
Unlike employees, freelancers are not on a company’s payroll and do not receive employee benefits such as health insurance, paid leave, or retirement contributions. Instead, they invoice clients for their work and are responsible for their own taxes. In the U.S., this means freelancers must typically pay self-employment tax in addition to income tax, and may need to make quarterly estimated tax payments.
For U.S. tax purposes, non-U.S. freelancers typically complete a Form W-8BEN to certify their foreign status. This helps the U.S. client determine whether withholding tax applies and at what rate, often reduced under an applicable tax treaty. Payment is then made directly, usually via bank transfer, PayPal, or other international payment services.
Many non-U.S. freelancers choose to operate under their own name or through a registered business, such as a local company in their home country or even a U.S.-based LLC. A U.S. LLC can sometimes simplify payment processing, reduce withholding, and create a more professional appearance to U.S. clients.
Freelancers have significant flexibility in choosing projects, working remotely, and determining their own work processes. However, they also carry the responsibility of handling all aspects of running their business, including contracts, marketing, bookkeeping, and compliance with applicable laws. This independence makes freelancing appealing for many, but it also requires discipline, business skills, and careful financial planning.
