Unemployment Benefits for Self-Employed, Contract and Gig Workers

By Indeed Editorial Team

Updated May 16, 2022 | Published June 15, 2020

Updated May 16, 2022

Published June 15, 2020

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Under normal circumstances, self-employed, freelance, contract and gig workers usually are not eligible to receive unemployment benefits because they don’t pay into their state's unemployment fund. The Pandemic Unemployment Assistance program, which provided aid to self-employed, temporary workers and gig workers who were out of work due to the COVID-19 pandemic, ended in September 2021. 


In this article, we discuss how unemployment benefits work for self-employed workers, how to check your eligibility and what kind of benefits could be available to you as a self-employed professional. 

Unemployment for self-employed workers 

Self-employment generally means you have no employer and you work for yourself. Types of self-employment can include:

  • Sole proprietorship (most small business owners)

  • Independent contractor

  • Gig worker

  • Freelance worker

Being self-employed can be challenging because you are not working for an employer and therefore are not always eligible for some of the same benefits as traditional employees, such as unemployment benefits. Because employers contribute to a state fund for unemployment benefits, workers who are self-employed usually can’t collect unemployment benefits if they’re out of work.


Most employers pay unemployment insurance taxes that support unemployment benefits payments, which provide temporary, partial income replacement to individuals who become unemployed through no fault of their own. For example, if you lose your job at a company due to layoffs, you are generally eligible to collect unemployment benefits for a period of time. The maximum amount of money you can collect and the benefits’ time limit, however, are determined by your state’s unemployment agency.

When contractors are employees

Some independent contractors are considered employees in certain states and therefore would be eligible for unemployment benefits. For example, in New York, even if your employer hired you to work as an independent contractor, the law may still consider you an employee per the ABC test. The ABC test is used to determine whether a worker is considered an independent contractor or an employee in the eyes of the government. 

How to check your eligibility


If you are considered an employee, you may qualify to receive unemployment insurance benefits. It’s a good idea to check with your state unemployment office right after you lose your job to see if you can collect unemployment benefits.


Read more: How to File a Claim With the Unemployment Office


Types of unemployment benefits for self-employed workers

In March 2020, the United States Congress passed the CARES Act, which included several subsets of benefits including the Pandemic Unemployment Assistance program (PUA). This program provided assistance to independent contractors, gig workers and self-employed workers who lost work due to the COVID-19 pandemic. Now that the federal government has ended pandemic unemployment benefits, these kinds of workers are generally not eligible for most regular unemployment insurance benefits. 


Self-employed professionals may be eligible for a few unemployment programs, including disaster unemployment and assistance and Self-Employment Assistance (SEA). 

Disaster Unemployment and Assistance (DUA)

Depending on the state you live in, you may qualify for the Disaster Unemployment Assistance program), which the federal government funds and assists people who have lost work due to a major disaster. To qualify for DUA program assistance, the disaster must be a presidential declaration, and you must be ineligible for other forms of unemployment compensation. 

Self-Employment Assistance Program (SEAP)

Self-Employment Assistance is a federally endorsed, voluntary, state program that provides a special type of unemployment aid to people who are displaced or out of work while starting a new business. To date, there are five states that offer SEA programs: Delaware, Mississippi, New Hampshire, New York and Oregon. 


SEA provides a weekly allowance similar to regular unemployment benefits. Instead of actively seeking full-time employment, however, SEA requires you to engage in self-employment activities full-time, such as building your business, marketing to clients and completing other activities that help you establish your new business and status as a self-employed business owner. 


Read more: Guide to Unemployment Benefits


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