10 Underrated Perks of Working for Someone Else

In the personal finance world, finding a way to be your own boss is a common aspiration. The many benefits of entrepreneurship  — such as flexible hours, unlimited income potential, and autonomy — are alluring and constantly espoused by those who embrace “the hustle.”

But what about everyone else?

While self-employment can be rewarding, a large swath of the population has no desire to break off on their own – and for good reason. The fact is, the perks that come with working for someone else can make being an employee more than worth it.

Here are some of the biggest advantages:

Benefit #1: Retirement Money

While it’s always possible to save for your own retirement, working for someone else can certainly give you an edge. From company 401(k) plans to stock options and other benefits, the retirement money that comes from employers can add up in a huge way.

Some employers even offer a 401(k) match as an incentive for you to contribute to your own account as well. This “free money” is generally offered up to a certain percentage of your pay, although each employer does it their own way. To get the full match, you generally have to contribute an equal or larger amount to your account as well.

According to research conducted by the 401(k) Help Center, the average 401(k) match offered by employers is 2.7%.  So, an employee that ponies up 2.7% of their pay for retirement might actually end up saving 5.4%.

Some employers also match a considerably higher percentage of pay for their employees, which can obviously help them save a lot more over time. For example, an employee that saves 10% of their pretax pay in a retirement account and receives a company match on the first 6% would wind up socking away 16% of their gross annual income each year.

Benefit #2: Paid Time Off

When you work for yourself, you can theoretically take an unlimited number of vacation and sick days. But since you don’t get paid for them, taking these days can present a huge problem.

That’s especially true when you run your own business or are self-employed; when you are a one-man show, it’s often impossible to take even a few days off. While you can technically turn off the email and disappear if you want, you run the risk of losing business if you fall too far off the radar. Further, taking too many days off means taking a huge pay cut, which is simply not possible for many who are trying to get a small business off the ground.

Meanwhile, hired workers took an average of 16 days of paid leave in the United States during 2013. While this figure is down from the year 2000 when employees took a total of 20.3 days off, it still represents a healthy amount of vacation and sick time that employees can benefit from.

Benefit #3: A Reliable Paycheck

It’s true that self-employment can mean unlimited income potential, but it’s also true that you could go broke. Only about half of new businesses survive the first five years, according to the Small Business Administration, and some estimates put the figure much lower. That’s right: The dream of entrepreneurship continually lures people in, but for many, it’s over just as quickly as it started.

While you may not earn as much as you want or deserve at a 9-to-5 job, you can at least count on a steady paycheck. And when you earn a steady paycheck, it’s a lot easier to stay on top of your monthly bills while also saving for the future.

Everyone wants to earn a lot of money, but for many people, earning consistently is even better. And when you have a steady paycheck to count on, you don’t have to spend your entire life worrying or wondering if you’ll still make the mortgage next month.

Benefit #4: Regular Work Hours

Ask any entrepreneur or small business owner about the downside of their situation, and most will tell you the long work hours take their toll. When you’re a one-person show, you have to do all of the work required to keep your business afloat, plus take care of all of the administrative tasks and grunt work. And even if you’re able to hire employees at a certain point, you still have to manage them!

When you’re employed by someone else, on the other hand, you usually have a predefined set of work responsibilities and pre-set hours. And when you’re done at the end of the day, you can go home and let someone else worry about it.

Benefit #5: Taxes Are Taken Out On Your Behalf

While working for yourself can help you enjoy some tax breaks that aren’t available to the 9-to-5 crowd, it generally means paying more in taxes as well. Without an employer to chip in for half of your Social Security taxes, the self-employed are left paying both halves on their own. Because of this, self-employed small business owners effectively pay one of the highest tax rates in the country.

When you’re an employee, your employer shoulders the burden of part of your tax liability. Further, they make paying taxes easier by taking your tax dollars directly from your paycheck dependent on your desired level of withholding.

People who work for themselves are forced to jump through dozens of complicated hoops in order to pay quarterly estimated taxes to their state and the federal government. And even then it’s not over; once they figure out what they owe, they have to write a huge check and fork that money over. (Trust me. That part hurts.)

Benefit: #6: Health Insurance and Other Benefits

While the Patient Protection and Affordable Care Act (PPACA), commonly known as Obamacare, intended to increase health care options for everyone, including small business owners and the self-employed, it isn’t necessarily affordable for everyone. And that is part of the reason some self-employed workers are avoiding the health insurance marketplaces and opting to pay the penalty or even join health care sharing ministries instead.

Meanwhile, those with employer-sponsored health care are almost always better off. While not all employees are happy with the health insurance their companies offer, many people point to their health care as the main reason they stay put in their careers.

Further, health insurance benefits can be worth huge sums of money. According to the Henry J. Kaiser Family Foundation, the average employer contribution for a family HMO plan for their workers was $12,129 in 2014, and the average contribution to a family PPO plan was $12,456. While employees are asked to pay varying amounts of money to cover their share of health insurance premiums, it’s hard to deny that the employer contribution can represent a huge chunk of change.

Benefit #7: Free Training and Opportunities for Self-Improvement

If you’ve been in your career for a while, you have probably participated in some type of training or continued education program- all paid for by your employer. While this type of training is often necessary, is can also be a huge benefit to you even after you move on to bigger and better things.

Workshops, employed-paid trips to conventions, and in-house training are benefits that can help you learn new skills, stay up-to-date on new technologies and methods, and network with other professionals in your field. And if you ever leave your company, you can take the knowledge you learn – and the contacts you make in the process – with you.

Benefit #8: You Don’t Have to Put it All On the Line

Remember how half of entrepreneurs fail in the first five years? That statistic proves just how risky starting your own business can be, and just how many people fail to launch their dreams into something tangible.

If you have people depending on you, the risk you’ll take to strike out on your own can be too much to bear. After all, risking it all to maybe make it big isn’t always an attractive proposition.

Working for someone else, on the other hand, isn’t quite as risky. While you may not be your own boss, you can often secure your place at the company and earn more each year just by working hard and adding value to the company. And if you have kids, a mortgage, and a slew of other financial responsibilities, a steady paycheck and a job you can count on can be a dream scenario on its own.

Benefit #9: Generous Perks

Employer-paid cell phones. Catered lunches. Company Christmas parties. Technology and tuition reimbursements. What do all of these things have in common? They’re perks you might receive as an employee, and things you’ll give up if you strike out on your own. With the average cell phone customer at the big-name carriers paying $90 a month for an individual plan, giving up that perk alone could mean losing out on more than a thousand dollars a year!

While benefits like these may not mean much on their own, they can add up in a huge way when lumped together and offered on a consistent basis. And that’s part of the reason smart employers offer extra perks to begin with; by being generous to their most valuable employees, they can keep them happier and extend the length of their employment as a result.

Benefit #10: A Sense of Belonging

While self-employment can be extremely fulfilling, it can be very lonely as well. When you’re on your own, you don’t normally have co-workers or team members to bounce ideas off of, vent to, or celebrate your successes with. And without those people, you can wind up feeling very isolated and uninspired.

On the other hand, working and collaborating with others allows you to be part of something bigger than yourself. It allows you to play off the strengths of others and use their insights and talents to improve your own work performance.

Further, co-workers can offer the kind of friendship that is hard to find elsewhere. When you work with others, your peers understand your struggles and aspirations like no one else can.

Maximizing the Benefits of Working for Someone Else

While you may dream of striking out on your own, working as an employee in a job you love may be good enough, too. In fact, working for someone else and becoming a valuable part of their team could actually make you wealthier over time – and without all the stress that comes with running your own business.

As always, the key is finding an employer that truly values the work you do. Furthermore, negotiating your pay and benefits from the beginning can help you maximize your earning potential from the get-go.

In the end, it’s all about finding the best deal for you – the deal that makes the most out of your talents and personal abilities while also leaving you fulfilled and lining your wallet.

Whether you get there through self-employment or working for someone else is totally up to you. Just remember, both options come with a slew of benefits and perks – and plenty of drawbacks.

What is your favorite benefit of working for someone else? Do you prefer being an employee?

Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.