Self-employment

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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