Self-employment

Self-employment is the state of working for oneself rather than an employer. Tax authorities will generally view a person as self-employed if the person chooses to be recognised as such or if the person is generating income for which a tax return needs to be filed. In the real world, the critical issue for tax authorities is not whether a person is engaged in business activity (called trading even when referring to the provision of a service) but whether the activity is profitable and therefore potentially taxable. In other words, the trading is likely to be ignored if there is no profit, so occasional and hobby- or enthusiast-based economic activity is generally ignored by tax authorities. Self-employed people are usually classified as a sole proprietor (or sole trader), independent contractor, or as a member of a partnership.

Self-employed people generally find their own work rather than being provided with work by an employer and instead earn income from a profession, a trade, or a business that they operate. In some countries, such as the United States and the United Kingdom, the authorities are placing more emphasis on clarifying whether an individual is self-employed or engaged in disguised employment, in other words pretending to be in a contractual intra-business relationship to hide what is in fact an employer-employee relationship.

2021 self-employment rate by country – OECD[1]
Country Rate (%)
 Colombia 53.1
 Brazil 33.3
 Mexico 31.8
 Greece 31.8
 Turkey 30.2
 Costa Rica 26.6
 South Korea 24.6
 Chile 23
 Italy 21.8
 Poland 19.7
 New Zealand 19.7
 Czech Republic 15.9
 Netherlands 15.8
 Spain 15.8
 Portugal 15.5
  Switzerland 15.3
 Finland 14.6
 Ireland 14.1
 Belgium 14.1
 Slovenia 14
 Latvia 13
 Israel 12.4
 France 12.6
 Hungary 12.5
 Austria 11.9
 Lithuania 11.6
 Sweden 10.6
 Luxembourg 10.2
 Japan 9.8
 Australia 9.5
 Germany 8.8
 Denmark 8.8
 Canada 7.7
 Russia 6.8
 United States 6.3
 Norway 4.7
  1. ^ "Self-employment rate". OECD.