To be emloyed on wages - Essay Example

To Be Employed On Wages To Be Employed On Wages Introduction There is no actual answer to the question as to which form of employment between wage and self is better. This is because when it comes to weight normal employment against self-employment, there are numerous host issues, which come into consideration (Ruiz-Tagle, 2008). And for each individual, the significance of these personal factors will differ. However, through the many conducted surveys with regards to this topic confirm that a lot of people opt for wage employment over self-employment.

“The main reason is because they prefer the more steady income that wage employment promises, unlike self-employment” (Miller & Huston, 2005). This paper will also support wage employment over self-employment. Meaning Employees under normal wage get compensated for their works on a regular basis, which can be weekly, biweekly or monthly, depending on their agreement with their employers (Miller & Huston, 2005). In some cases, others even get paid on a daily basis. However, the employer dictates both when and how the employee works.

“They pay can be an hourly wage or salary, or, at times, it can be settled on another basis like per-call basis if you are a call center representative or sales commissions for salespersons” (Miller & Huston, 2005). However, in the least case, it can be hourly wages when work is performed. In such employments, the boss normally settles half of the worker’s medical bills in form of Medicare and Social Security taxes, as well as payroll taxes (Miller & Huston, 2005). The employee issues to his or her workers a W-2, which outlines compensation, as well as taxes settled for the previous tax year.

In essence, in such an employment, everything is done for the worker and his or her duty is just to work and be paid (Miller & Huston, 2005). A person is considered to be self-employed when they opt to be acknowledged as such or when they generate income by themselves such that they are needed to file a tax return under the law, which subsists in the relevant jurisdiction (Ruiz-Tagle, 2008). The main issue for taxing bodies is not that the individual is trading, but whether the individual is profitable, and; therefore, possibly taxable.

In essence, the activities of self-employed individuals will most probably be ignored if they do not make any profit. Therefore, hobby-, part-time and fan-based economic proceedings are mainly ignored by authorities (Ruiz-Tagle, 2008). Also, self-employed individuals mainly look for their own work instead of being offered one by an employer, getting income for a business of trade, which they operate. Therefore, with this in mind, it is vital to look at the pros and cons of each type of employment in order to see why this paper supports wage employment.

Pros and Cons of Wage Employment Pros Some of the benefits of working in wage are extremely significant, and nearly all of the benefits surpass the benefits of self-employment. “For example, the employer pays half of the Medicare and Social Security taxes” (Ruiz-Tagle, 2008). Also, the boss brings together payroll taxes in each and every paycheck, thus there is no need to estimate tax payments. Workers under wage employment also benefit from minimum wage laws; therefore, at no time will they be undercompensated for the amount of work they do (Ruiz-Tagle, 2008).

Also, with such laws comes job security. Workers under wage employment normally have job security because they cannot be laid off just like that devoid of any form of compensations (Miller & Huston, 2005). This is referred to as unemployment compensation, which is normally available when one loses his or her job. Such employees also enjoy regular payments, as well as other benefits. Cons Some of the main cons of being involved with waged employment are that it is less flexible when it comes to scheduling and work (Miller & Huston, 2005).

A majority of waged employment also offer fewer opportunities to work at home. Finally, the compensation rate might be lower. Pros and Cons of Self-Employment Pros Self-employments agitate for more freedom in scheduling, as well as performing work (Ruiz-Tagle, 2008). Also, no taxes are deducted from payments. With this benefit also brings the prospect of less tax-deductible expenses with regards to the business. “Self-employed workers are also in a better position to work from the comfort of their homes.

Compensation rates are also normally higher” (Ruiz-Tagle, 2008). Cons The cons of venturing into self-employment are that the person settles all Medicare and Social Security taxes alone (Ruiz-Tagle, 2008). Cost of running the commerce is settled by the self-employed individual. There is also less job security because of less pool of capital. Income also comes on an uneven basis. Finally, there is no minimum income protection. Conclusion The above stated pros and cons will definitely be an issue when one comes to selecting the type of employment they want to venture into.

However, the main issues that come into play include the basis of payment (is it regular or not) and job security. Other factors come later. Wage employment promises this, but self-employment does not. Therefore, if job security and regular payment are taken into consideration, waged employment is better than self-employment. References Miller, L. A. & Huston, J. (2005). Wage employment vs. self-employment. Briefing Paper, 13(1), 1-8. Ruiz-Tagle, J. (2008). Self-employment versus wage-employment: A dynamic choice model.

Journal of Small Business Management, 3(5), 23-27.