NEUTRAL COMPARISON
Self-employment or sole trader?
Self-employment suits you when you want to take assignments and receive salary without running a business. A sole trader structure suits you when you want to build your own business and control its finances and administration.
01 · THE BASICS
Two different ways to get paid
With self-employment, the self-employment company is the contracting party, invoices the client and pays salary for the approved assignment.
As a sole trader, you invoice through your own business and are responsible for bookkeeping, tax, VAT, insurance and business agreements.
Base your choice on how you work, your costs, and how much control and administration you want to take on.
02 · OVERVIEW
Compare side by side
| Question | Self-employment | Sole trader |
|---|---|---|
| Who invoices? | The self-employment company | Your sole trader business |
| How do you receive the money? | As salary | Through the business |
| Your own F-tax | Not required for the self-employment company’s invoice | The business normally needs F-tax or FA-tax approval |
| Bookkeeping for the client invoice | Handled by the self-employment company | You are responsible |
| VAT | Handled by the self-employment company for its invoice | You are responsible for VAT reporting |
| Business expenses | Handled under the service terms | Handled in the business under current rules |
| Control | Limited by the service terms and structure | You control the business finances and administration |
03 · DECISION SUPPORT
When does self-employment fit?
Self-employment can suit you when you want to start without your own business administration.
- you want to test an assignment or invoice occasionally
- you want to receive the compensation as salary
- you have few business expenses of your own
- you want invoicing and employer administration handled for you
04 · DECISION SUPPORT
When does a sole trader structure fit?
A sole trader structure can suit you when you want to build and control your own business.
- you have recurring costs or investments
- you want to control business finances and deductions
- you are building several client and revenue streams
- you are prepared to handle or pay for bookkeeping and administration
05 · COST
Compare costs for your situation
Self-employment is not always cheaper or more expensive than being a sole trader. Compare the service fee with the cost and time required for bookkeeping, software, insurance, advice and other business administration.
Consult an accounting professional or another qualified adviser if the choice affects major investments, deductions or your overall tax.
FREQUENTLY ASKED QUESTIONS
Common questions about the choice
Want to compare using your invoice amount?
Calculate self-employment or read the broader guide.