Self-employment has existed since The Sims, when Sims could sculpt and paint using skill objects, or (with The Sims: Unleashed) plant garden vegetables and sell their paintings, sculptures, and produce for money. Self-employment for a Sim means using the Sim's skills and abilities to earn money. A Sim doesn't need to join a career track to earn money, though The Sims 3: Ambitions made it possible to register as self-employed, joining a skill career in the process, and earn even more money and track progress in the field.
The Sims 2
In The Sims 2, Sims are able to paint, sculpt, garden, fish, and play music for tips. The Sims 2: Open for Business expanded this into retail careers, hair-styling, toy-making, robotics, and flower-arranging. Progress in Open for Business self-employment skills is tracked by talent badges.
The Sims 3
All of the skills used in skill careers can also be used to earn money without registering officially as self-employed and joining a skill career, but joining a skill career has the advantage of Simoleon bonuses and tracking progress.
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The Sims 4
The Sims 4 does not have skill careers, but Sims can still earn money through painting, woodworking, fishing, playing music for tips, hacking, and gardening. The Sims 4: Get to Work also adds a retail self-employment option, which includes selling baked goods. The Sims 4: Dine Out adds the option for Sims to run their own restaurant and The Sims 4: Cats & Dogs allows Sims to run vet clinics.
With patch 73, Sims can register with the Ministry of Labor as a self-employed Sim over the phone. They are able to give themselves a title and a description. Patch 79 added the freelancer career, which allows Sims to work on their own time from home.