Self-employed hourly rate rises faster than employees, study shows

Thursday 14 September 2017

UK freelance professionals saw a significant increase in their salaries between 2010 and 2015, new findings show.

A study from PeoplePerHour was analysed by researchers at the University of Westminster Business School, who found that the mean hourly rate for freelancers rose by 26.83 per cent, jumping from £16.34 in 2010 to £20.73 in 2015.

In comparison, a study from the Annual Survey of Hours and Earnings (ASHE) discovered that full-time staff experienced a 4.52 per cent rate of growth and saw lower earnings per hour - £14.60 in 2010 and £15.26 by the end of 2015.

This means that, by the end of 2015, self-employed professionals on PeoplePerHour earned an average of £5.47 (36 per cent) more per hour than the national average for workers. 

Xenios Thrasyvoulou, founder and chief executive of PeoplePerHour, said: "In 2010, in the midst of the financial crisis, freelancers on PeoplePerHour were already earning more than their employed counterparts, and that gap has significantly widened.

“The fact that freelancers using our platform are significantly out-earning the national average wage is a reflection of two factors: the quality of the work delivered and the growth in demand from businesses wanting to hire skilled professionals on a freelance basis.”

Mr Thrasyvoulou explained that there is now a higher number of highly-skilled professionals looking for a better work-life balance, and turning to self-employment as a way to achieve it.

He went on to say that freelancers can pick and choose their preferred clients, as well as negotiating their hourly rate. 

Businesses are also willing to pay more for the skills, experience and flexibility provided by self-employed professionals, Mr Thrasyvoulou added.

How can freelancers handle their tax duties properly?

Working for yourself is highly appealing. After all, no boss, your own clients and your own working hours does sound especially attractive!

However, sorting out taxes and other financial responsibilities can be particularly tough, especially for those who have no experience of doing so. Rather than trying to understand a particularly challenging field, perhaps consider hiring experts to help in these areas. 

Freelancer and contractor accountants in particular can help in the transition from full-time to self-employment. By ensuring your processes are up to date with the latest regulations, these experts will make sure you do not face hefty fines or severe reputational damage. 

By Victoria McDonnell

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