I’m putting a stake in the ground. I think that women who are returning to work following a career break should seriously consider looking for a part-time salaried job rather than going straight into freelancing.
I have been working with women full time since 2015 and I have learned a lot about what women want versus what they are actually able to do.
What women want
Many women that I’ve worked with would be happy to bring home £1,000 to £2,000 per month if their partners are already working. If they are single mothers, they tend to need to earn more, but I’ve found that many of them would still be happy with £1,500 to £3,000 per month.
What women are actually able to do
Women are 1000% capable of being freelancers – I know because I have met a TON of successful ones. Annie Ridout even wrote a very popular book called The Freelance Mum about the tips and tricks that helped her build a better working life around her family.
That said… in an effort to be authentic, I wanted to share my thoughts on why freelancing can be misleading and why considering a part-time salaried job might be the best first step following a career break.
Why Freelancing is Misleading
Freelancing is actually worse in terms of protection for you as an individual than a zero-hours contract. Unless you set yourself up properly, you will miss out on:
- Paid Holiday Leave (12.07% covered by employer)
- Pension pay (8% = 3% employer, 5% staff)
- Taxes being automatically taken out (20% on anything over £12,501 up to £50,001)
- Training funding (not required but often provided by employers)
Let’s break these down a bit more…
Paid Holiday Leave – When you work for someone else, they are required by law to give you paid time off. Meaning that if you work 50% (20 hours per week), over the course of a year you earn 188 hours of paid leave (the equivalent of 9 weeks off). In order to recuperate this as a freelancer, you need to automatically charge 12.07% more per hour AND THEN you need to set up a savings account so each time you get paid, you put your holiday pay there (so that when you want a holiday, you can still take a salary!).
Pension pay – Here’s the deal, when you work for someone else, in order to trigger the auto-enrollment, you need to earn £10,000 in your first year and to consistently reach the threshold (the amount you need in order to continue to receive pension payments), you need to continue to earn more than £6,240 (for the 20/21 tax year).
So… if you are freelancing, let’s assume you want to earn at least £10,000 per year. You need to add another 5% on top of your hourly rate to cover a pension contribution AND THEN you need to set up your own pension scheme and pay 8% (remember 3% should come out of your existing hourly rate) into it every month to match what you would be getting in a company pension.
It is worth noting that a pension is not required if you are a director of your own company. But as this Sunday Times article by Kate Palmer points out, the pensions gap for women continues to grow – currently a third lower amongst working women (not to mention freelancers who don’t have a pension plan set up!). So long term, you are missing out by not finding a job which must pay into a pension scheme (£10k+ per year) or by not setting up a plan for yourself if you decide to go the freelance route.
Holiday + Pension combined To sum up, based on what I’ve outlined above, if you go freelance, you need to make sure that you are charging 17.07% on top of your hourly rate to cover your paid holiday and pension plan AND then to match what you would be getting at a company, you need to set aside an additional 3% for a total of 20.07% (12% for paid holiday and 8% for pensions).
Taxes If you earn £12,500 or less, you fall into the 0% tax bracket. That said, if you are earning over £12,501, you do need to pay taxes and the rate is 20% on anything over £12,501 up to £50,001. If you are freelancing, you need to make sure that if you invoice over £12,500 in the year, you are putting 20% of the amount over £12,500 away into a SAVINGS account so that when your HRMC bill comes, you can pay it.
Training funding Want to upskill in order to stay up to date? If you are freelancing, this is 100% down to you. I personally spend about £1500-£3000 a year upskilling myself and my team, so if this is important to you, you might want to think about accounting for that.
What if freelancing is still my only option?
Go for it! But I would encourage you to take heed of what I have said above and make sure you are able to charge enough to justify your time and cover all those perks that a salaried job over £10k per annum would normally cover.
Just don’t forget that many companies are now starting to offer flexible, part-time roles that are well paid. They aren’t the norm, but they do exist and they come with the perks built-in.
Don’t know where to look for part time, flexible salaried work? Here is a list of over 30 places to find flexible work online.
A bit of wait and see on this one… (Pregnant than Screwed isn’t convinced!)
- Government launches flexi-hours jobs site for mothers with 50,000 adverts aimed at helping women balance children with work by Harry Cole
Not ready to go back to work yet and need a confidence boost and upgraded digital skillset?
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The TechPixies Pro Rata Calculator
If you do decide that freelancing is the way to go, I know it is tricky to try and do the calculations yourself when it comes to how much you should charge in the context of a full time or part time salary – so I’ve made it easy for you and created the TechPixies Pro Rata Calculator which tells you exactly what the hourly rate equivalent should be for the various salary levels. I hope you find it super useful and will also consider receiving our weekly tips if you aren’t already.