What is the Difference Between Being Self-Employed and a Small Business Owner?

Many people tend to use “self-employed” and “small business owner” interchangeably when discussing their business. At TL;DR, we refer to different types of clients as noted below:

  • Self-Employed: Works for themselves
  • Small Business Owner: Hires employees or independent contractors

I refer to TL;DR: Accounting as a small business, especially since our team has grown, but that doesn’t mean that if you have hired employees that you can’t refer to yourself as self-employed.

There is no tax difference between being self-employed or being a small business owner. The biggest dictator of your tax situation depends on how your business is formed, like making the S-Corp election.

TL;DR: Use whichever term feels like it fits your situation – we don’t judge.