Freelancing is built around working independently in a remote setting, and is characterized by short-term, project-by-project basis work that the freelancers do for multiple businesses or employers. The freelancing market, AKA the sharing economy, is a labor market offering jobs like virtual assistant, content writing, tutoring, graphic designing, website designing, and even food delivery.
Freelancing as a career option exploded in popularity during the COVID times as job security became increasingly uncertain. The workforce turned to freelancing or hunting for foreign clients to tap into the more profitable market and boost livelihood instead of running on the hamster wheel of low-paying local job markets.
Not to mention, both sides benefited in the bargain, as freelancers earned much more than a regular 9-to-5 job could ever pay, and employers saved big on health coverage and paid vacation time.
With freelancing amassing massive popularity, a greater number of Americans also joined the bandwagon. Investopedia reported, citing Upwork research, that 64 million Americans — or 38% of the U.S. workforce — resorted to gig or freelancing employment in 2023. A staggering $1.27 trillion was contributed to the economy by these independent contract workers.
Research conducted by Jitjajo shows that the rise in non-traditional jobs allowed workers to exert greater control over their lives with reduced work hours. About 63% of employees transitioning from the 9-5 grind to flexible work hours say they won’t trade their freedom for security, with 44% of recently laid-off Americans claiming they have a side hustle to escape the constant fear of losing their job.
To determine which US states are ideal for freelancers, researchers at Bonus.com developed a Freelancer-Friendly Index. Ten important factors are assessed by the index, such as the cost of living, coworking spaces, income tax rates, average yearly wages, freelance job openings, and internet speed. The index offers a thorough rating of the best states for freelancers to prosper by giving each state a score out of 100., and the list is as follows:
1. Tennessee: (score 78.20 score; $90,063 average annual freelance salary) With 7.2 freelance jobs per 100,000 citizens, low-income tax rates, reasonably priced housing, and a large number of co-working spaces, Tennessee is the best state for independent contractors. It also has a low cost of living index.
2. Texas: (76.63 score; $92,448 average annual freelance salary) With a high average yearly wage and advantageous business environment, Texas is the second-best state for independent contractors. The state is a desirable place for freelancers because it has no income tax, lots of open jobs, and fast internet.
3. Nevada: (73.74 score; $101,047 average annual freelance salary) With an average pay of $101,047, no individual income tax, and 24.1 freelance openings per 100,000 population, Nevada is the third-best state for freelancers.
4. Virginia: (69.93 score; $98,379 average annual freelance salary) With an average pay of $98,379, 11.3 freelance jobs per 100,000 persons, and the second-fastest internet speed (505.6 Mbps), Virginia is ranked fourth for freelancers and encourages remote work.
5. Missouri: (69.42 score; $93,078 average annual freelance salary) Missouri is a great choice for freelancers, ranking seventh with an average salary of $93,078; a median income tax rate of 3.5%; and six freelance positions per 100,000 persons.
6. Pennsylvania: (69.14 score; $99,469 average annual freelance salary) With an average salary of $99,469, Pennsylvania ranks sixth among states for freelancers, making it a competitive choice for remote workers looking for high compensation.
7. Maryland: (69 scores; $96,307 average annual freelance salary) Maryland offers a competitive and opportunity-rich environment, ranking eighth for freelancers with an average pay of $96,307 and 13.9 freelance positions per 100,000 persons.
8. Colorado: (68.69 score; $104,342 average annual freelance salary) Colorado is a top option for remote workers looking for high compensation and a good work environment because it offers the highest freelance wage at $104,342.
9. Georgia: (68.03 score; $83,788 average annual freelance salary) Georgia is a competitive choice for remote workers looking for possibilities in a business-friendly state, ranking tenth for freelancers with an average pay of $83,788.
10. Delaware: (67.21 score; $99,316 average annual freelance salary) With an average pay of $99,316, a median income tax rate of 4.4%, and 59.6 freelance openings per 100,000 citizens, Delaware is ranked tenth for freelancers and provides a competitive and opportunity-rich environment.
