Andover limousine airport .. Chicago Drug testing

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:

SpaceX’s Dragon Endeavour spacecraft crewed by NASA astronauts Doug Hurley and Bob Behnken has docked with the International Space Station on its historic Demo-2 mission. .
As economic activity resumes in China following the first wave of the coronavirus pandemic, levels of the air pollutant nitrogen dioxide (NO2) are rising to traditional standards for the first time this year. 
SpaceX has launched NASA astronauts Doug Hurley and Bob Behnken on their historic Demo-2 mission to the International Space Station. The mission is the first time that astronauts have launched from American soil since the final Space Shuttle flight in 2011.
SpaceX and NASA are edging closer to the second launch attempt for the historic Demo-2 mission that will send astronauts Doug Hurley and Bob Behnken to the International Space Station.
SpaceX and NASA are keeping a close eye on the weather ahead of their second attempt at a historic crewed launch from Florida. The launch will see astronauts travel to space from U.S. soil for the first time since 2011.
The asteroid that slammed into Earth some 66 million years ago and wiped out the dinosaurs also produced a gigantic pool of magma many times larger than the crater at the center of Yellowstone National Park, new research reveals.
Ten percent of COVID-19 patients with diabetes die within one week of being hospitalized, according to the first study of the virus to examine its impact on hospitalized patients.
Two altars in an ancient shrine in Israel have been revealing their secrets.
A South Carolina town is investigating how a massive alligator was removed from a mini-golf course this week, according to local officials.
Elon Musk and President Trump have been working toward the common goal of sending American astronauts to space from U.S. soil, which could come to fruition on Saturday.

Uncover Free Veins Of Gold By Prospecting Online Guru Newsletters (Part 1 of 2)

Incredible as it sounds, you have a goldmine of free... Read More

An Example of Business Automation - eCards with pizazz

The last time I spoke and went into a bit... Read More

Business Debt Collection Letter Writing Secrets

Debt collection letters--an overview"Debt collection letter" in the singular may... Read More

The Perfect Mission Statement

One way to determine your companies mission statement is based... Read More

How to Avoid the Most Common Reasons for Small Business Failure

The life cycle of the typical small business is short... Read More

Entrepreneur to Employer

You make the decision to go into business and for... Read More

7 Essentinal Resources for Small Business

So you want to start a business but you don't... Read More

Pet Grooming Business

Do you like animals? Would you like to work for... Read More

Small Business Owners - Form a Relationship with Your Bank Manager

It's just like a marriageTo expect a bank manager or... Read More

The Advisory Board: A Business Owners Most Valuable Resource

As a company grows, the owner's role begins to change.... Read More

How to Make Your Business Image Stand Out Above The Crowd

Traditional advertising methods are still being used for almost 90%... Read More

Keep TRACK of your Business Relationships and Gain Profits

How do you know when an alliance needs to be... Read More

Buying a Franchise

Buying a franchise is not for everyone. This guide will... 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

Collaborative Negotiating: A Win-Win Strategy

COLLABORATIVE NEGOTIATING:Collaborative negotiating is a win-win strategy that can focus... Read More

Politics, Environmental Rules, and Mobile Car Washes

During the California Recall Election, I was very interested. Without... Read More

Learning and Growing

As you reflect on this year and prepare for next... Read More

Are You a Small Business Casualty?

When a person knows and knows not that he knows.... Read More

Restaurant Operators - What Skills do you Need

A tongue-in-cheek look at the skills required to operate a... Read More

To Buy A Fat Pig

What does buying a fat pig have to do with... Read More

5 Small Business Management Questions to Help Choose Marketing Programs

As small business managers, we juggle limited resources in a... Read More

Collect that Debt - Your Business Depends on it

The efficiency of debt collection is the difference between a... Read More

Small Business Computer Security, the Basics

Anyone in business today realizes both the natural dependency on... Read More

Do You Need the Help of a Virtual Assistant?

Running a business, whether large, small or in your home,... Read More

How to Prevent Home Business Burnout

As a home business proprietor, you may already realize why... Read More