Career Advice

17 November/2021

Figuring Out Your Hourly Rate When You're Self-Employed

At some period in time, you may need to calculate your pay rate as an entrepreneur. Maybe you want to compare it to the pay rate you earn when you work for employers to see if you're doing well by working on your own. Maybe you need to figure out your salary to answer questions for another person. These are some steps to figuring that out for yourself:

Write Down Your Total Income

The easiest part of the process is writing down how much you earn. Use the straight cash figure for the amount you earned during the week first. For example, write down a flat £200 if that's what you earned babysitting.

Subtract Your Expenses

This part is an extra step you'll need to take if you want to be as accurate as possible. Subtracting your expenses from the other monetary figure will help you get a more accurate depiction of how much money you make. Therefore, you should deduct any fuel, food, clothing, and other expenses that you have related to your self-employment. Use the figure left over as your actual earnings. For example, you should write that you made only £50 if you had to spend £20 on fuel costs to earn £70 delivering pizzas.

Figure out the Hours You Worked

Tracking the time you work is essential when you're self-employed, since you may not have a standard time clock. Log your hours in a book if you need to, and then use the number of hours worked during the week to help you figure out your hourly income. Divide the total pay by the number of hours to arrive at your figure. You earn a pay rate of £10 an hour if it takes you 20 hours of work to earn £200, for example.

Once you're done performing the steps above, you'll know how well you're doing in the money-making area. You can then do with the information what you need to do to achieve goals and make decisions.

Reset Career 17 November , 2021