25/11/2025
Good evening!
I hope all is well with everyone and you are keeping warm.
I quite often get asked why do I charge so much for my hourly rate so here is a good explanation to follow- many people do not realise the hidden costs us self employed workers have to pay!
Many people wonder why self-employed workers often charge higher hourly rates than traditional employees. The key reason is simple: being self-employed means covering all the costs that an employer would normally pay. What looks like a high hourly rate isn’t “extra profit”—it’s what keeps the business running.
Here are some of the hidden expenses self-employed workers must pay for themselves:
1. Insurance
Self-employed workers have to pay for their own business insurance, liability coverage, tool insurance, and sometimes even health insurance. These costs can be significant, but they’re essential for protecting both the worker and the client.
2. Travel Expenses
Employees typically get travel covered or work close to one location. Self-employed people often travel between jobs, paying for fuel, vehicle maintenance, parking fees, tolls, and time spent on the road—none of which is paid by a boss.
3. Taxes
While employees have taxes automatically handled, self-employed workers must pay:
• Self-employment tax
• Income tax
• VAT (if registered)
• Accountant fees
They must also set this money aside themselves.
4. Tools, Equipment, and Supplies
Every tool, repair, replacement, upgrade, and material comes out of their own pocket. There’s no company fund or reimbursement.
5. No Paid Time Off
Self-employed workers don’t receive:
• Holiday pay
• Sick pay
• Pension contributions
• Maternity/paternity leave
If they take a day off, they don’t get paid, so their rates reflect that reality.
6. Admin & Business Costs
Running a business means handling:
• Marketing
• Website/advertising fees
• Invoicing and bookkeeping time
• Training and certifications
• Software or subscription tools
All of this takes time and money outside the hours spent working for clients.
I really hope this helps everyone to have a better understanding on why you may think the rate is high
Kerry ❤️