The cost of a freelancer compared to an employee

Everyone knows that freelancers are expensive, right? They charge hourly/daily rates far greater than what you would pay an employee…so it must be a more expensive option!

Ok, so what if we consider all the on costs associated with an employee… tax, NI, sick pay, holiday pay and pension. That’s before we get into training, office equipment, tea/coffee and biscuits! £££

Have you thought that also need to have all the correct employment contracts, documents and policies & procedures in place as well as thinking about how to recruit and retain employees?

Not a single one of these costs are associated with a freelancer.

There are online calculators that give you the true cost of an employee. I played around with some figures and employing a part-time personal assistant paid the average UK salary (£16 hour) can cost in the region of £40 per hour.

Surprised? You’re not alone, many business owners hear the hourly/daily rate and panic but as you can see it actually works out to be much more cost-effective.

Now if we compare this to the average cost of a virtual assistant in the UK (£25-£35) per hour, the cost of a freelancer doesn’t seem quite so expensive. This is especially true when you combine with other major benefits including no, or limited, commitment. If business is slow or there is a crisis you can always reduce the number of hours, unlike with a permanent employee who will need to be paid whatever. So crucial for many businesses survival in the uncertain times that we are facing.

This example is true for Virtual Assistants but I am sure that we would see similar results if we looked at other roles and industries.

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