Image Credit: Kenzoka
Regular employees get a fixed pay and leave is usually included in it. When a regular employee applies for leave to go on a vacation, the only financial consideration is whether or not they can afford the vacation itself. Due to the nature of their work, freelancers have to content with many more costs.
A freelancer gets paid only for work done. Therefore, taking a vacation means less money coming in for that period. A regular employee on the other hand gets the same pay regardless of whether they take a break or not. In some cases, leave can be encashed. This means that an employee can actually get paid for not taking leave!
So if a freelancer has to take a vacation, the cost of that vacation is not only the actual money spent, but also the money that will not be earned for that period – in other words, the opportunity cost of being on leave. This turns out to be much more expensive, and acts as a deterrent against excessive leave taking.
Part of the purpose of this category of posts is to educate people and make them aware that freelancing isn’t as easy as it looks. It has it’s perks, sure, but if you can’t handle the downside, then it’s not something you want to take up.
Earlier this week, I examined the issue of software piracy and why Microsoft needs Piracy to survive. It’s interesting how such a counter intuitive concept can actually make sense. Take a look at it, and leave your comments on what you think about it.