These US States Offer the Best Conditions for Self-Employed Workers

Being self-employed can offer more freedom over how and where you work, but the experience can vary across the U.S. Earnings, rent, unemployment, and taxes can all affect how much money self-employed workers have left to spend.

A new study by Wolfstone Digital ranks U.S. states to find where people have the best conditions for being self-employed. The study compares the share of residents who are self-employed, average monthly self-employed earnings, median rent, rent as a share of self-employed earnings, unemployment, and take-home pay after taxes.

South Dakota takes the top spot as the best state for self-employed workers. The state has 12.06% of residents working for themselves and average monthly self-employed earnings of $2,692. Median monthly rent is $999, meaning rent takes up 37.10% of average self-employed earnings. South Dakota also has one of the lowest unemployment rates at 1.9%.

Vermont follows in second place, with the highest share of self-employed residents among the top 10 at 14.43%. Self-employed workers earn an average of $2,863 per month, while median rent is $1,319. The state has an unemployment rate of 2.5% and 84.32% of pay remains after the effective tax burden.

North Dakota takes third, helped by a low rent burden and strong earnings. Self-employed workers earn an average of $2,849 per month, while median rent is $980. Rent accounts for just 34.39% of average self-employed earnings, the lowest figure among the top 10.

Montana lands fourth, with 15.84% of residents self-employed, the highest share in the full ranking. The average self-employed worker earns $2,471 per month, while median rent is $1,177. The state's unemployment rate is 2.9%.

Wyoming rounds out the top five. The state has 12.08% of residents who are self-employed and average monthly earnings of $2,588. Median rent is $998, taking up 38.56% of average self-employed earnings. Wyoming also has an unemployment rate of 3.2%.

Maine claims sixth place, with 13.69% of residents working for themselves. Average monthly self-employed earnings reach $2,607, while median rent stands at $1,210. The state has an unemployment rate of 3.2%.

Nebraska takes seventh, recording average monthly self-employed earnings of $2,567 and median rent of $1,102. Rent accounts for 42.92% of average self-employed earnings, while the unemployment rate is 3%.

Wisconsin sits in eighth, with the second-highest average monthly self-employed earnings among the top 10 at $2,718. The state has 8.50% of residents who are self-employed and median rent of $1,142. Its unemployment rate is 3.1%.

Oklahoma claims ninth place, with 10.79% of residents self-employed and average monthly earnings of $2,486. Median rent is $1,044, equal to 41.99% of average self-employed earnings. The state also has an unemployment rate of 3.1%.

Iowa completes the top 10. The state has 10.61% of residents who are self-employed and average monthly earnings of $2,529. Median rent is $981, taking up 38.78% of average self-employed earnings. Iowa's unemployment rate is 3.8%.

These are the least favorable states for self-employed workers

Florida sits at the bottom of the ranking. The state has the highest share of self-employed residents in the full ranking at 13.08%, but average monthly self-employed earnings are just $2,012. Median rent reaches $1,812, taking up 90.04% of average self-employed earnings. Florida also has the highest effective take-home pay figure at 88.40%.

California ranks 49th, despite having 12.01% of residents working for themselves. Average monthly self-employed earnings stand at $2,657, but median rent is $2,104, the highest in the ranking. This means rent takes up 79.17% of average self-employed earnings.

New Jersey lands in 48th place, with average monthly self-employed earnings of $2,734 and median rent of $1,800. Rent accounts for 65.84% of average self-employed earnings, while the unemployment rate is 5%.

Maryland takes 47th, with 9.82% of residents self-employed and average monthly earnings of $2,613. Median rent is $1,721, which represents 65.85% of average self-employed earnings. The state has an unemployment rate of 3.6%.

Utah completes the bottom five. The state has 9.08% of residents who are self-employed and average monthly earnings of $2,451. Median rent reaches $1,593, taking up 64.98% of average self-employed earnings. Utah has a relatively low unemployment rate of 3.3%.

The full list:

Rank	State	Share of residents who are self-employed (%)	Average monthly self-employed earnings ($)	Median monthly rent ($)	Rent as a share of self-employed earnings (%)	Unemployement rate (%)	Effective tax burden (take-home pay %)	Total score
1	South Dakota	12.06	2,692	999	37.10	1.9	86.49	78.58
2	Vermont	14.43	2,863	1,319	46.07	2.5	84.32	77.26
3	North Dakota	10.32	2,849	980	34.39	2.5	86.15	76.45
4	Montana	15.84	2,471	1,177	47.62	2.9	84.66	71.08
5	Wyoming	12.08	2,588	998	38.56	3.2	86.74	70.57
6	Maine	13.69	2,607	1,210	46.41	3.2	84.52	67.89
7	Nebraska	10.48	2,567	1,102	42.92	3	84.33	62.38
8	Wisconsin	8.5	2,718	1,142	42.01	3.1	84.37	60.79
9	Oklahoma	10.79	2,486	1,044	41.99	3.1	83.26	60.66
10	Iowa	10.61	2,529	981	38.78	3.8	83.2	59.94
11	Mississippi	9.75	2,550	990	38.82	3.9	84.94	59.60
12	New Mexico	10.32	2,609	1,117	42.80	4.1	84.94	58.88
13	Idaho	13.15	2,533	1,384	54.62	3.7	84.38	58.29
14	Alaska	10.03	2,900	1,444	49.79	4.7	86.01	57.85
15	Alabama	9.26	2,440	1,077	44.12	2.9	83.21	55.80
16	Missouri	9.08	2,526	1,067	42.24	4.1	85.26	55.07
17	Washington	10.09	3,050	1,824	59.80	4.5	85.77	54.83
18	New Hampshire	10.03	2,618	1,558	59.49	3	86.66	54.76
19	Minnesota	9.24	2,637	1,291	48.95	3.6	83.73	54.16
20	Hawaii	11.94	2,797	1,942	69.41	2.7	82.39	53.23
21	Tennessee	9.63	2,444	1,284	52.53	3.6	87.11	52.81
22	Kansas	9.78	2,401	1,079	44.93	3.8	83.92	52.77
23	Arkansas	10.08	2,226	982	44.10	3.8	85.77	52.46
24	Indiana	8.18	2,562	1,104	43.08	3.6	81.9	51.99
25	Colorado	11.93	2,831	1,822	64.34	4.2	83.48	51.67
26	Louisiana	10.88	2,302	1,064	46.20	4.4	85.12	51.44
27	Texas	10.52	2,508	1,475	58.79	4.1	86.94	50.14
28	South Carolina	9.95	2,498	1,272	50.90	4.3	84.42	49.92
29	Connecticut	10.56	2,561	1,550	60.51	3.8	85.41	49.89
30	New York	9.33	2,946	1,634	55.46	4	79.32	49.89
31	North Carolina	9.88	2,447	1,338	54.67	3.7	84.56	49.34
32	Ohio	8.22	2,560	1,090	42.58	5	84.76	49.28
33	Pennsylvania	8.39	2,699	1,252	46.38	4	79.65	49.22
34	Oregon	11.61	2,847	1,597	56.09	5	78.09	47.74
35	Rhode Island	9.49	2,637	1,418	53.77	4.6	83.61	47.59
36	Illinois	9.05	2,609	1,322	50.66	4.4	82.18	47.36
37	Delaware	8.59	2,695	1,530	56.77	4.3	83.45	45.81
38	Kentucky	8.77	2,338	998	42.67	4.7	82.76	45.63
39	Virginia	8.7	2,669	1,646	61.65	3.6	83.2	45.37
40	Arizona	10.43	2,509	1,672	66.63	4.1	85.55	44.08
41	West Virginia	7.24	2,084	883	42.36	3.8	85.71	44.06
42	Massachusetts	8.91	2,941	1,848	62.84	4.8	81.88	43.33
43	Georgia	10.61	2,273	1,506	66.23	3.4	84.6	42.95
44	Nevada	8.94	2,742	1,709	62.32	5.3	86.38	42.73
45	Michigan	9.07	2,347	1,168	49.76	5.2	83.99	41.65
46	Utah	9.08	2,451	1,593	64.98	3.3	82.54	41.37
47	Maryland	9.82	2,613	1,721	65.85	3.6	79.71	41.19
48	New Jersey	9.46	2,734	1,800	65.84	5	84.28	40.90
49	California	12.01	2,657	2,104	79.17	5.5	84.5	35.78
50	Florida	13.08	2,012	1,812	90.04	3.8	88.4	34.25

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Methodology: The study ranks U.S. states using a weighted index based on six measures linked to self-employment and the financial conditions faced by self-employed workers.

Each metric was given a weight based on its importance. The metrics include:

• Share of residents who are self-employed, 20%

• Average monthly self-employed earnings, 25%

• Median monthly rent, 15%

• Rent as a share of self-employed earnings, 15%

• Unemployment rate, 15%

• Effective tax burden, 10%

Sources: U.S. Census Bureau, ZipRecruiter, U.S. Bureau of Labor Statistics, SmartAsset.