Sole trader vs. freelancer: what's the difference actually?
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
A sole trader business is a legal form recorded in the trade register; zzp'er is not a legal form but a description of how you work, and only your legal form determines liability and tax.
- With a sole trader business you are liable for business debts with your private assets.
- You pay income tax on your profit, not on what you withdraw privately.
- You can be an entrepreneur for VAT without being an entrepreneur for income tax.
- A sole trader may employ staff; the label zzp'er then no longer fits.
The terms freelancer and sole trader are often used interchangeably, as if they're the same. Yet they don't mean exactly the same. The difference is subtle, but good to know. This article clearly explains how the terms relate to each other.
What is a sole trader business?
A sole trader business is a legal form: the legal form in which you run your business. With a sole trader business, you and your company are the same for tax purposes; you pay income tax on the profit and are personally liable. It's the most chosen legal form for starting entrepreneurs.
What is a freelancer?
ZZP stands for self-employed without staff. That's not a legal form, but a description of how you work: as a self-employed person without people employed. A freelancer usually has a sole trader business, but could in theory also have another legal form.
How do they relate to each other?
In short: freelancer says something about how you work (alone, without staff), sole trader business says something about your legal form. Most freelancers have a sole trader business, which is why the terms often coincide in practice. That's why they're used interchangeably.
A few more terms float around in the same corner. They are listed side by side below, so you can see which say something about your legal form and which only about how you work.
| Term | What it is | Is it in the trade register? |
|---|---|---|
| Sole trader business | Legal form | Yes |
| Partnership | Legal form, with multiple owners | Yes |
| BV (private limited) | Legal form, a legal entity in its own right | Yes |
| Freelancer (zzp'er) | A description of how you work | No |
| Freelancer | Everyday language, not a legal term | No |
Why does it matter?
For your tax and liability your legal form counts, so the sole trader business. Whether you call yourself a freelancer doesn't change that. It's good to know the distinction, so you know that tax rules concern your legal form, not the label freelancer.
That difference is not theoretical. It determines three things you notice in practice straight away.
- Liability. With a sole trader business there is no separation between you and your company: a business debt is your debt, privately too. With a BV that works differently.
- Tax. You pay income tax on your sole trader business's profit, not on what you withdraw. A private withdrawal is therefore not an expense.
- Deductions. The self-employed deduction hangs on the hours criterion, not on the word freelancer on your website.
Entrepreneur for income tax, or only for VAT?
This is the distinction that matters far more in practice than the difference between freelancer and sole trader, and it trips up many starters. You can be an entrepreneur for VAT without being an entrepreneur for income tax.
For VAT you are quickly an entrepreneur: you independently and regularly supply goods or services for payment. For income tax the tax authorities look more strictly: at your profit, the number of clients, your independence and the risk you run. If you fall outside that, your income is 'result from other activities' and you have no right to entrepreneur's deductions. See entrepreneur for income tax or VAT and from side income to a business.
What does 'without staff' actually mean?
The p in zzp stands for personnel, but that boundary is looser than it looks. If you hire someone, you are formally no longer a zzp'er, while your legal form remains a sole trader business. As a sole trader you may employ staff; see hiring your first employee.
If you work with other self-employed people who invoice themselves, you remain a zzp'er: they are not staff but subcontractors. It then matters all the more that the working relationship is sound, because hiring freelancers carries its own risks; see hiring a freelancer or an employee.
Frequently asked questions
Is a freelancer the same as a sole trader business?
No. A sole trader business is a legal form recorded in the trade register. Zzp'er describes how you work: independently and without staff. Most freelancers have a sole trader business, hence the confusion.
Can a freelancer also have a BV?
Yes. You still work independently and without staff, but your legal form is a BV. You are then a director-major shareholder and pay yourself a customary salary.
Must I register with the Chamber of Commerce as a freelancer?
You register your legal form, so your sole trader business. Anyone independently and regularly supplying goods or services must do so. See registering with the Chamber of Commerce.
Can I have several sole trader businesses?
You can have several trade names and activities, but for tax there is usually one business whose profit you add up. If the activities are genuinely separate, they can be two businesses. Have that assessed, because it affects your deductions.
Am I a freelancer if I also have a job?
Yes, that combines perfectly well. Your salary falls in box 1 as wages, your profit as business profit. Watch the hours criterion, though, because it gets harder alongside a job. See part-time freelancing alongside a job.
Does anything change if I hire staff?
Not for your legal form: a sole trader business may employ staff. You do add payroll records, payroll taxes and employer obligations. The label zzp'er is then strictly speaking no longer accurate.
Sources
- Getting started as a freelancerOndernemersplein · ondernemersplein.overheid.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
