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Help, I think I totally screwed myself...
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randella
Love my little man
Member since 8/05 16290 total posts
Name:
Randi
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Help, I think I totally screwed myself...
This is work related. Anyone who is a freelancer would probably be able to help me, although the damage is done. People keep giving me different pieces of info and I am freaking out.
So, I made the move from full time work to freelance. I have never worked full time freelance and was always a little wary in figuring out what my hourly rate would be, based on my annual salary.
Anyway, my old job that was paying me an annual salary had offered me a certain amount per hour for a project. I also spoke with a recruiter who specializes in placing freelancers, and they told me what my hourly rate would be based on my annual income-- and this jived with what my previous employer offered me. So, I am thinking-- cool, I have my rate.
So, now that I am getting gigs-- and I start on a long-term one tomorrow, I gave them that rate. I am also in the process of trying to figure out what I need to set aside for taxes and now I am thinking I drastically underestimated my rate. Since what I am getting paid does not account for SS and other payroll taxes, etc., and that sh!t adds up!! I know I will not take home my gross income, but it seems like I will need to set aside 50% of my income which seems RIDICULOUS!!
I have been trying to hook up with my accountant to really determine how to set everything up. I am going to incorporate and make deductions, etc., but the guy is slammed with tax season and we won't get to sort this out til after 4/15-- there is no rush, but I just WANT to know and I am freaking out now that I have given my rate to two employers. I just don't want to be taken advantage of and I can't go back on my rate now. 
Did I totally screw myself over??? The "equation" that the recruiter told me was basically, if you make $100,000 annually, your hourly rate is $50/hour. At this point, it is what it is-- and I can't ask for more money until I am there for a little, prove myself and get proof from my accountant or whatever that I am being under paid.
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Posted 4/2/08 6:07 PM  |
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Long Island Weddings
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julz33
i run for bacon
Member since 5/05 20584 total posts
Name:
julz
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Re: Help, I think I totally screwed myself...
Sorry, I have no clue.  I hope you can work it out!
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| Posted 4/2/08 6:12 PM |
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pnm1654
Mommy to 2 boys!
Member since 5/05 4565 total posts
Name:
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Re: Help, I think I totally screwed myself...
My husband freelances and he was able to find out what the "going rate" is for his type of work. Is there anyone you can call in your type of business that can give you an idea of what the freelance rate is? $50 an hour may be the going rate for your type of work and telling someone a much higher hourly rate may scare them away.
As for taxes, I would say 95% of the companies he works for take out taxes, social sec., etc. For the ones that don't we set aside 30% in a separate bank account.
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| Posted 4/2/08 6:17 PM |
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DRMom
Two in Blue
Member since 5/05 20223 total posts
Name:
Melissa
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Re: Help, I think I totally screwed myself...
Posted by randella
This is work related. Anyone who is a freelancer would probably be able to help me, although the damage is done. People keep giving me different pieces of info and I am freaking out.
So, I made the move from full time work to freelance. I have never worked full time freelance and was always a little wary in figuring out what my hourly rate would be, based on my annual salary.
Anyway, my old job that was paying me an annual salary had offered me a certain amount per hour for a project. I also spoke with a recruiter who specializes in placing freelancers, and they told me what my hourly rate would be based on my annual income-- and this jived with what my previous employer offered me. So, I am thinking-- cool, I have my rate.
So, now that I am getting gigs-- and I start on a long-term one tomorrow, I gave them that rate. I am also in the process of trying to figure out what I need to set aside for taxes and now I am thinking I drastically underestimated my rate. Since what I am getting paid does not account for SS and other payroll taxes, etc., and that sh!t adds up!! I know I will not take home my gross income, but it seems like I will need to set aside 50% of my income which seems RIDICULOUS!!
I have been trying to hook up with my accountant to really determine how to set everything up. I am going to incorporate and make deductions, etc., but the guy is slammed with tax season and we won't get to sort this out til after 4/15-- there is no rush, but I just WANT to know and I am freaking out now that I have given my rate to two employers. I just don't want to be taken advantage of and I can't go back on my rate now.
Did I totally screw myself over??? The "equation" that the recruiter told me was basically, if you make $100,000 annually, your hourly rate is $50/hour. At this point, it is what it is-- and I can't ask for more money until I am there for a little, prove myself and get proof from my accountant or whatever that I am being under paid.
My husband and i just went through this at the accountant. If he makes 100,000 he has to pay quarterly....get ready for it....$7500! That is only for self employment tax-not inlcuding SS. Have you signed a contract at that rate? If not I would let them know that your rate has increased due to tax liability and you are wiling to meet them in the middle. I would also have a contract drawn up that state sthat prices can chance with no notice or something to that effect. GL!
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| Posted 4/2/08 6:19 PM |
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randella
Love my little man
Member since 8/05 16290 total posts
Name:
Randi
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Re: Help, I think I totally screwed myself...
Posted by melijane
My husband and i just went through this at the accountant. If he makes 100,000 he has to pay quarterly....get ready for it....$7500! That is only for self employment tax-not inlcuding SS. Have you signed a contract at that rate? If not I would let them know that your rate has increased due to tax liability and you are wiling to meet them in the middle. I would also have a contract drawn up that state sthat prices can chance with no notice or something to that effect. GL!
Based on that-- that's basically 30%, which I am ok with.
Grrr.. I hate finances and it's SO confusing. I don't know why a recruiter and my old job who knows what I am worth would tell me something that is wrong, but now I am worried. I had all the time in the world to research this, but I didn't doublecheck because I assumed it was right. And now that I start something and they are paying me that rate-- and I gotta figure out taxes, all this extra sh!t is adding up.
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| Posted 4/2/08 6:22 PM |
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randella
Love my little man
Member since 8/05 16290 total posts
Name:
Randi
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Re: Help, I think I totally screwed myself...
Posted by pnm1654
My husband freelances and he was able to find out what the "going rate" is for his type of work. Is there anyone you can call in your type of business that can give you an idea of what the freelance rate is? $50 an hour may be the going rate for your type of work and telling someone a much higher hourly rate may scare them away.
As for taxes, I would say 95% of the companies he works for take out taxes, social sec., etc. For the ones that don't we set aside 30% in a separate bank account.
Well, as I said-- I spoke to a recruiter who was going to send me on interviews and she told me what my rate was based on my salary-- so I assumed it was right-- that would have been my "going rate".
Any company that pays me will take nothing out-- I will need to set it all aside and pay taxes on my own.
What doesn't make sense to me, is that I worked at Bloomies for a few months, and I got paid basically a third of what I would be making now. That hourly rate annualized, matched up to 1/3 of my professional annual salary. And based on my estimates, I will work about 7 less hours a week than I did at Bloomies, but will only take home about $150 more a week. So-- how does that add up? Make 3 times the amount, BUT work 7 less hours-- and that's only $150 more a week?? This is why I am worried. ETA-- this is if I set aside 50% of my income.
Message edited 4/2/2008 6:27:58 PM.
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| Posted 4/2/08 6:27 PM |
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