Know the Differences Between Fomal and Informal Jobs Before you Get into It

First of all, we know for sure what a job is. Now, do we know the difference between formal and informal jobs?

All activities in which a person is hired to perform a series of specific tasks in exchange for economic compensation fall into this category: the capitalist economic system.

Employment is the most important and widespread labor relationship, which is the fundamental cell of every company.

The website Ejemplos, explains there are two types of work established: formal, which is subject to regulations and registered in the State, and informal, which is not.

The formal employment is the legal one, and therefore the one that is subject to the corresponding taxes. 

The total amount of money agreed upon does not come from the employer to the employee, but a part arrives, the so-called net salary.

Another part, the so-called deduction, that can be a tribute that the employee does not perceive, or some perception indirectly.

Photography: Internet

The most common are health coverage, and social security, which is a portion dedicated to when the employee does not work anymore.

This type of work must comply with the conditions established by the State, such as the minimum wage. 

Mostly it is advantageous for employees, and states usually create incentives to expand the number of formal employees: decreasing regulations should not be one of them.

Examples of formal work




Agent Minister


Industrial engineer




Financial organizer

Examples of informal work


Food delivery


Metallurgical worker

Taxi driver 


Field pawn 


Informal jobs are, on the other hand, those that are outside the Law. 

Although some of them are prohibited, illegal ones, many times the State does not make too many efforts to fight against it and even hires people under this modality.

It is usually associated with lower-skilled jobs, but sometimes even the most qualified jobs have this type of contract.

It is possible that employees prefer this type of contracting, although, as said, having no type of coverage nor insurance is much more unstable.

When it comes to illegal activities, of course, the work is informal because it can not be registered in any type of public dependency, but there is also informal employment in lawful activities.

Leave a Reply

Your email address will not be published. Required fields are marked *