Why Do Freelancers Charge Higher Rates?

As a full-time freelance writer, editor, and designer, I regularly bump into resistence to the rates I (and other freelancers) charge. Why do we charge what we do for our services?

Part of the premise of the question comes from a presumption that is, I think, common especially with businesses and organizations that employ freelance contract work. The thinking goes something like this: “If we tasked an employee with this work on a full-time basis, it wouldn’t cost nearly as much on a per-hour basis as the rates this freelancer asks.”

That’s probably true. So how come freelance work costs what it does?

Not Your Employee

First and foremost: as a freelancer, I am not your employee; I am self-employed, and doing contract work for you (or your organization). As such, I have to provide for myself all of the things that you and your employees may take for granted. You may be surprised at all that this entails.

Taxes

Self-employed people pay taxes at a different rate. In addition to the same taxes any employed worker pays (federal, state, and local income tax, for example), the “self-employment tax” is also imposed upon any who earn more than $400 in a tax year as a freelancer. This tax goes into the Social Security and Medicare pool; whereas…