Maintain your old Siemens Hipath system

Self-Employment: Do you know the Difference between Rates and Wages

The difference between rates and wages is not always clear to newly self-employed people and their wage-earning clients.

Both look similar on the surface; both are expressed in dollars and cents per hour. But they each represent something very different.

Wages are the payment a worker receives for his labor.

Rates are the payment a business receives for performing a serivce to a client. In addition to the labor used in performing that service, rates must cover the business's overhead.

Because of that, rates have to be higher than hourly wages earned by employees for comparable work.

Most newly self-employed workers are former employees. They are accustomed to receiving pay based on wages. Because they don't understand the difference between rates and wages, when they start out, they tend to set their rates too low.

To survive, your rates must be high enough to pay the bills and enable you to earn a living.

Some of the differences between a self-employed person's rates and an employee's wages are explained below.

WAGES

? If you are a wage earner, you are due an hourly wage just by being present and willing to work at a set time, for the period of time demanded by your employer.

Your wage is the payment for your labor.

? The employer supplies the necessary equipment and supplies for you to do the work. And, the employer supplies your workplace.

? You enjoy all of the legal and social protections due to employees such as Unemployment Insurance, and employer paid Worker's Compensation Insurance.

? Most full-time employees enjoy fringe benefits. These range from paid vacation and sick days, subsidized health insurance, retirement benefits, etc. to stock options and more to higher ranking employees at larger companies.

RATES

? As a self-employed service provider, you receive income based on your billable hours, that is, time spent on performing services for your clients.

? You furnishes your own supplies. Unless the service is one that is performed off- site, you supply your own workspace.

? You have to equip yourself to be in business and provide your services: You must procure and equip your workplace, invest in skill and product development, market your services, purchase business insurance, and handle billing, recordkeeping and collections.

? As a business owner you take on a great deal of risk. It is reasonable, and expected, that your rates should allow for a reasonable profit over and above your expenses and salary.

The above is true for any business. Below are additional costs you pay because you are self-employed.

? Unlike most of your employed counterparts, there is no employer subsidy for your health insurance. And, as an individual, your costs will be higher than they would be as part of a larger organization.

? Aside from Social Security, you are totally responsible for your own retirement nest egg.

? You will pay both the employee's and the employer's share of the FICA tax burden (15.3%); double the burden that falls upon your employee counterparts. The IRS allows limited deductions for this tax, but your net share is still far higher than for your employed counterparts.

But you can only bill for services rendered.

The upshot is that as a self-employed service provider you must cover many expenses that employees do not. Therefore you should have no qualms about charging an adequate rate to cover your expenses and make a living.

Ellen Zucker's site, http://www.selfemployment101.com, has articles and resources to help the creative sole-proprietor earn a living and create a life.

Have Ellen's articles directly sent to your inbox. Subscribe to The Self-Employment Lady.

In The News:

Trump 'knew it was wrong' to pay hush money, says ex-lawyer
Fri, 14 Dec 2018 10:58:00 +0000
Donald Trump's former lawyer has again said the president directed him to arrange hush money payments to two women - and said the president knew it was wrong.

Strasbourg Christmas market gunman shot dead
Thu, 13 Dec 2018 15:25:00 +0000
The man suspected of opening fire at a Christmas market has been shot dead, the French interior minister has said.

Chelsea fans accused of antisemitic chanting during match
Fri, 14 Dec 2018 06:32:00 +0000
Chelsea fans have been accused of racist chanting in their Europa League draw away at Vidi on Thursday night.

Flight turns around after human heart left on board
Fri, 14 Dec 2018 07:40:00 +0000
A flight from Seattle to Dallas was forced to turn back after a human heart was left on board.

US Senate blames Saudi crown prince for Khashoggi's death
Thu, 13 Dec 2018 21:14:00 +0000
The US Senate has passed a resolution stating Crown Prince Mohammed bin Salman is responsible for the killing of journalist Jamal Khashoggi.



tikatoshop.it

Erfahrungen mit Pallhuber Wein
Agen Bola SBOBET Terpercaya

Travel in comfort and at your leisure with CT Airlink Limousine & Car Service for top quality private transportation and exceptional customer service. We operate Sedans, SUVs & Vans for CT Car Services to covering all Connecticut airports including Car Service from CT to Newark Airport , Mohegan Casino Uncasville CT, Foxwoods Casino Mashantucket CT, Manhattan Cruise Terminal NYC, Brooklyn Cruise Terminal NYC and Bayonne Cruise Terminal NJ. CT Airlink hire licensed and friendly chauffeurs who have in-depth knowledge of the Areas.

Old Data in Database Marketing Software

Database Problems in MarketingI have been working on a direct... Read More

Auto Detailers and Competitive Aspects of Automobile Detailing

There are both fixed and mobile detailers. Consumers often will... Read More

Five Tips for First Time Entrepreneurs

It seems so long ago that I started my first... Read More

Aircraft Washing Service Operations Manual

Anyone who is serious about washing aircraft as a full... Read More

Increase the Wealth in Your Community

Many of us have noticed how some nearby communities seem... Read More

The Step Zero Effect

The key to organizational focus and helping those who need... Read More

Small Business Mistakes: Are You Making Enough of Them?

That's right ­ are you making enough mistakes in your... Read More

Small Business And The Ability To Find Market Place Opportunities

Marketing is one of the four corner-posts of a solid... Read More

Accounting and Billing Procedures for Small Business

No matter how small your small business is, it is... Read More

Getting Behind in Your Work? You Need a Virtual Assistant!

If you don't know what a Virtual Assistant (or VA)... Read More

Carwash Franchisor Case Study

There are only a handful of car wash franchises in... Read More

The ABCs of Fundraising

There are many little details that go into making sure... Read More

Dispute Resolution; Competing With Other Franchisees

If you are in a franchise and have a territory... Read More

Knowledge is Power

Why does research and education play an important part of... Read More

Don?t Wait for the Perfect Plan

1. Don't Spend Too Much Time PlanningWhen you are entering... Read More

Build Credibility with Expertise

As an Investment Representative you've worked hard to build trust... Read More

Expanding A Mobile Car Wash Business

What is the best time to expand a mobile car... Read More

Choosing a Truck Wash Location in Nevada, Case Study

There are several well-known truck washes in the Great State... Read More

5 Good Reasons a Self-Employed Professional Should Take Vacation

So you think you're not justified in taking time away... Read More

Your Practice is Only as Valuable as Your Referral Base

Many physical therapists in private practice have the appearance of... Read More

Passion Is Key To A Successful Business

Passion. Passion alone can make your business successful. As an... Read More

Do You Need Accounting Software for Your Small Business?

If you're anything like me then you dislike with a... Read More

Obtain Maximum Results For Your Small Business Through Better Time Management

Most small business owners are faced with so many responsibilities... Read More

Do You Make These 7 Deadly Cash Flow Mistakes?

Managing cash flow is every small business owner's most important... Read More

Pressure Washer Companies and Steam Cleaner Maintenance

If you run a pressure washing business it is a... Read More