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Financing freelance

Posted almost 2 years ago by Ellie Tibbs
Pexels Photo 443383

We have previously recognised the volume of freelancers and temporary workers has steadily been increasing aligned with demands for greater flexibility in the workplace. However, with a new flux of workers, comes increased confusion over aspects such as what you should be charging.

Pay can be regarded as one of the most difficult questions to ask as a freelancer. Aim too high and you may outprice yourself from the market, too low and you could be underselling yourself.

When getting starting out, it is vital to understand your worth. To help you along your way, we have created salary guidelines for the North (Inclusive of Manchester & Liverpool), the Midlands (Birmingham) and home counties markets.

Though salaries will differ per location, you rates should remain as consistent as possible during each contract.

It is also worth noting that, the volume of money you take away from a contract will differ dependant on whether you operate as a limited company or are paid through an umbrella company. Either way, it is important you select an option which works best for you.

In all situations we advise you discuss the legal financial implications of each with your financial adviser.

For those who opt to take a PAYE Umbrella route, you will be paid on a weekly basis with Pitch. To put it simply, the umbrella organisation act as your payroll team, meaning all taxes are paid through the organisation as you go. Occasionally however, we have come across a confused freelancer who wonders why their fellow freelance colleague is getting paid ‘more’ than them for the same role.

This is potentially because they are operating as a limited company. In these situations the freelancer will be responsible for paying their own tax and will therefore be paid their gross pay for each contract period.

What is better - Umbrella or Limited Company?

To decide what will be best for you, it is vital you speak to a financial adviser. However, we frequently come across some basic questions asked by freelancers and contractors which have been answered below.

 

Whilst operating as a limited company can have many financial benefits, especially for those contractors who want faster access to money. For those looking for a hassle free approach to contracting, the umbrella route can appear most attractive. Regardless of this, we once again advise you speak to a financial adviser to work out which option is best for you.

If you are looking to enter the freelance market and require further advise on how to make this move, feel free to get in touch with our dedicated temporary and freelance consultants today or check out our freelance life video series.

 

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Header: Highrise building by Juhasz Imre https://www.pexels.com/photo/architectural-design-architecture-building-business-443383/