Get a quick overview of when it makes sense to hire freelancers vs. permanent employees
Many companies have noticed freelancers, but still revolves around the eternal doubt:
Should we throw ourselves into that? work with a freelancer for the task, or should we hire a permanent employee?
It can be a difficult choice.
In many of our blogs, we write about the benefits of hiring a freelancer.
But that doesn't mean that finding external labor necessarily makes sense for you. It depends on finances, flexibility, types of tasks, and the organization's long-term goals.
Here you will get a thorough cost-benefit analysis of when it is best to hire a freelancer and when it makes sense to build a permanent team.
Overall, you can look at these five parameters. What suits your company and the nature of the task?
Permanent and freelance economics: What does it cost?
Of course, finances have a lot to say in the choice. Because it doesn't really matter how the money is spent and when – for either large or small companies.
But we can clarify one thing about permanent employees versus freelancers: One is not, by definition, more expensive or cheaper than the other.
It may be. But the crucial thing is to choose a solution that makes economic and practical sense now and in the long term.
Let's start by taking an objective look at what the permanent employee and freelance economy look like:
Costs of permanent employment
- Fixed salary (regardless of whether there are tasks or not)
- Holiday pay (12.5 %)
- Pension (often 8–10 %)
- Illness, maternity and other days of absence
- Equipment, workplace and licenses
- Time spent on recruitment and onboarding
Costs of a freelancer
- Hourly or project price
- No costs for vacation, pension, equipment, etc.
- Only pay for real work
- Lower administrative burden (especially when using platforms like Factofly)
Flexibility and Commitments: There's More to Mathematics
It can be tempting to compare freelancers and permanent employees directly on price.
A permanent employee with a monthly salary of DKK 45,000 actually costs the company around DKK 60,000 - 65,000/month, when vacation pay, pension, equipment and absence are taken into account.
A freelancer working 80 hours on a project at 650 per hour will cost 52,000 DKK – without any additional obligations.
But the calculation must be made with an eye to the nature of the task – and the need for flexibility.
Because even though there are not as many obligations (termination notices, etc.) attached to a freelancer as there are to an employee, the function can be postponed when using a freelancer - who can interrupt the collaboration at any time, just as you can.
In some cases, a permanent employee will be the best investment: For example, if there is a continuous need for the function to be filled, if you want close cultural integration or want to build knowledge internally.
In other cases, it will be more economically and strategically advantageous to hire a freelancer, especially for short-term, specialized or scalable tasks and projects.
Administration: hidden costs and resource drain
When comparing permanent employment with hiring freelancers, one should consider the administrative obligations that come with a traditional employment relationship:
- HR processes
- vacation planning
- salary reporting
- pension
- contracts
- employee interviews
- compliance
... it all takes time and requires specialized knowledge in-house.
Freelancers with CVR are responsible for all the administrative work themselves – and if you hire the freelancer through Factofly, then the freelancer administration lives entirely with us, so neither you nor your external partner have to think about it.
Therefore, it is important to ask yourself:
1) Do you have the administrative and financial resources internally for another permanent employee?,
2) is the function constant or seasonal, and
3) how many hours per day/week are spent at work.
Because again – if the function is temporary or project-based, you should consider a freelancer.
Specialized knowledge: precision over capacity
One of the biggest advantages of hiring a freelancer is access to specialized knowledge – exactly when you need it.
Where a permanent employee often covers a wide range of responsibilities and continuously develops in the position, the freelancer brings in updated expertise from day one.
It could be a developer with a handle on the latest framework, a translator with industry insight, or a campaign specialist with experience from similar projects.
In this context, freelance economics becomes not just a question of hourly rate, but of value creation per hour.
The right freelancer can solve a limited task faster, more efficiently and with greater quality, which can ultimately provide a better return than using internal capacity that needs to be upskilled along the way.
Danger zone: Reclassification
Recently, there is one thing in particular that we have seen the Danish Tax Authorities go after hard: fake self-employed people.
Fake self-employed people are people with (typically) sole proprietorships who service a single customer over an extended period of time. If the relationship can be characterized as an employment relationship and not a customer-supplier relationship, you can both get your ears in the machine.
From the Tax Office's perspective, this is a so-called "reclassification" of the freelancer from supplier to employee. This will naturally have consequences for both parties.
As a client, you also have a responsibility, and even if you have entered into a freelancer with the best of intentions and in good faith, you must also ensure that the person in question is actually running a business and that it does not end up with an circumvention of an employment contract.
If your need is for a long-term relationship, but for one reason or another you cannot hire the candidate directly, you may want to consider an EOR solution. Reach out to us directly and find out how we can help.
Conclusion: What pays off?
When doing a cost-benefit analysis, it is important to look beyond the paycheck.
It's about economics, yes – but also about efficiency, risk management and adaptability.
- Do you have one? long-term need for capacity and cultural anchoring? Then permanent employment is the way forward.
- Do you need fast execution, specialized knowledge or flexible scaling? Then you should consider hiring a freelancer – with the greatest advantage through Factofly.
With the right structure, it is no longer a choice between flexibility and security – it is possible to have both.
Book a call already today, we will help you find the talent you need – and set up the collaboration for you.
Get a quick overview of when it makes sense to hire freelancers vs. permanent employees
Many companies have noticed freelancers, but still revolves around the eternal doubt:
Should we throw ourselves into that? work with a freelancer for the task, or should we hire a permanent employee?
It can be a difficult choice.
In many of our blogs, we write about the benefits of hiring a freelancer.
But that doesn't mean that finding external labor necessarily makes sense for you. It depends on finances, flexibility, types of tasks, and the organization's long-term goals.
Here you will get a thorough cost-benefit analysis of when it is best to hire a freelancer and when it makes sense to build a permanent team.
Overall, you can look at these five parameters. What suits your company and the nature of the task?
Permanent and freelance economics: What does it cost?
Of course, finances have a lot to say in the choice. Because it doesn't really matter how the money is spent and when – for either large or small companies.
But we can clarify one thing about permanent employees versus freelancers: One is not, by definition, more expensive or cheaper than the other.
It may be. But the crucial thing is to choose a solution that makes economic and practical sense now and in the long term.
Let's start by taking an objective look at what the permanent employee and freelance economy look like:
Costs of permanent employment
- Fixed salary (regardless of whether there are tasks or not)
- Holiday pay (12.5 %)
- Pension (often 8–10 %)
- Illness, maternity and other days of absence
- Equipment, workplace and licenses
- Time spent on recruitment and onboarding
Costs of a freelancer
- Hourly or project price
- No costs for vacation, pension, equipment, etc.
- Only pay for real work
- Lower administrative burden (especially when using platforms like Factofly)
Flexibility and Commitments: There's More to Mathematics
It can be tempting to compare freelancers and permanent employees directly on price.
A permanent employee with a monthly salary of DKK 45,000 actually costs the company around DKK 60,000 - 65,000/month, when vacation pay, pension, equipment and absence are taken into account.
A freelancer working 80 hours on a project at 650 per hour will cost 52,000 DKK – without any additional obligations.
But the calculation must be made with an eye to the nature of the task – and the need for flexibility.
Because even though there are not as many obligations (termination notices, etc.) attached to a freelancer as there are to an employee, the function can be postponed when using a freelancer - who can interrupt the collaboration at any time, just as you can.
In some cases, a permanent employee will be the best investment: For example, if there is a continuous need for the function to be filled, if you want close cultural integration or want to build knowledge internally.
In other cases, it will be more economically and strategically advantageous to hire a freelancer, especially for short-term, specialized or scalable tasks and projects.
Administration: hidden costs and resource drain
When comparing permanent employment with hiring freelancers, one should consider the administrative obligations that come with a traditional employment relationship:
- HR processes
- vacation planning
- salary reporting
- pension
- contracts
- employee interviews
- compliance
... it all takes time and requires specialized knowledge in-house.
Freelancers with CVR are responsible for all the administrative work themselves – and if you hire the freelancer through Factofly, then the freelancer administration lives entirely with us, so neither you nor your external partner have to think about it.
Therefore, it is important to ask yourself:
1) Do you have the administrative and financial resources internally for another permanent employee?,
2) is the function constant or seasonal, and
3) how many hours per day/week are spent at work.
Because again – if the function is temporary or project-based, you should consider a freelancer.
Specialized knowledge: precision over capacity
One of the biggest advantages of hiring a freelancer is access to specialized knowledge – exactly when you need it.
Where a permanent employee often covers a wide range of responsibilities and continuously develops in the position, the freelancer brings in updated expertise from day one.
It could be a developer with a handle on the latest framework, a translator with industry insight, or a campaign specialist with experience from similar projects.
In this context, freelance economics becomes not just a question of hourly rate, but of value creation per hour.
The right freelancer can solve a limited task faster, more efficiently and with greater quality, which can ultimately provide a better return than using internal capacity that needs to be upskilled along the way.
Danger zone: Reclassification
Recently, there is one thing in particular that we have seen the Danish Tax Authorities go after hard: fake self-employed people.
Fake self-employed people are people with (typically) sole proprietorships who service a single customer over an extended period of time. If the relationship can be characterized as an employment relationship and not a customer-supplier relationship, you can both get your ears in the machine.
From the Tax Office's perspective, this is a so-called "reclassification" of the freelancer from supplier to employee. This will naturally have consequences for both parties.
As a client, you also have a responsibility, and even if you have entered into a freelancer with the best of intentions and in good faith, you must also ensure that the person in question is actually running a business and that it does not end up with an circumvention of an employment contract.
If your need is for a long-term relationship, but for one reason or another you cannot hire the candidate directly, you may want to consider an EOR solution. Reach out to us directly and find out how we can help.
Conclusion: What pays off?
When doing a cost-benefit analysis, it is important to look beyond the paycheck.
It's about economics, yes – but also about efficiency, risk management and adaptability.
- Do you have one? long-term need for capacity and cultural anchoring? Then permanent employment is the way forward.
- Do you need fast execution, specialized knowledge or flexible scaling? Then you should consider hiring a freelancer – with the greatest advantage through Factofly.
With the right structure, it is no longer a choice between flexibility and security – it is possible to have both.
Book a call already today, we will help you find the talent you need – and set up the collaboration for you.
