For What Hourly Wages is Self-Employment Worthwhile?!
 |
| Photo by Tai's Captures on Unsplash |
Hanifmr.com - The image of the self-employed is often too positive for many.
At least in terms of working hours and income, I have the idea that every self-employed person is a bed of roses. Current statistics show that this is not the case.
In this article, I would therefore like to investigate the question of the hourly wage at which self-employment is even worthwhile.
For What Hourly Wages is Self-Employment Worthwhile?!
 |
| For What Hourly Wages is Self-Employment Worthwhile?! |
At the very beginning, you have to say, of course, that this question cannot be answered in such a general way.
Various factors come into play, which ensures that every self-employed person has different ideas about a sufficient hourly wage.
Anyone who lives in Munich's city center and has to look after a family certainly has different requirements for an hourly wage than a single who has just started living in a two-room apartment in the countryside.
Nevertheless, one can approach this question by looking at the planned minimum wage for employees, for example. This should be 8.50 euros gross.
If you extrapolate this to a 40-hour week, you get a monthly net income of around 1,000 euros.
But can you do the math as a self-employed person and aim for an hourly wage of 8.50 euros?
Necessary Hourly Wage
No, you can't. As a self-employed person, you don't have a net income, but a gross income. The money that goes into your business account is by no means what the self-employed person ultimately has in their pocket.
Additional expenses for the self-employed include:
- Income tax
- Business tax
- Membership fees (e.g. IHK)
- Health insurance * (employee and employer share)
- Retirement provision
- Further professional or company insurance
- Operational costs such as rent, technology, etc.
One should not forget that the value-added tax must also be paid from the money received on the account.
A total of 40-50% goes to various costs, expenses, and charges before one can speak of net income. For this reason, the minimum wage has to be roughly doubled to around 17 euros.
But that should still not be the hourly wage with which one calculates customer orders. After all, no self-employed person can account for 100% of his time. Especially those self-employed who work on customer projects or offer services usually have to at least double this hourly wage.
To be able to save money for bad times or longer periods of illness, you have to add additional surcharges to the hourly wage.
And let's be honest, which self-employed person then only wants to earn the minimum wage in the end. After all, you often work more, have more responsibility and of course more risk.
The bottom line is that many factors influence your desired hourly wage and must be factored in when calculating your hourly wage.
Entrepreneurs and the Hourly Wage
But the reality cannot be disregarded when it comes to this topic. A desired hourly wage is one thing, what you can enforce on the market is the other.
Entrepreneurs in particular often have very low real hourly wages. On the one hand, this is due to the not yet so good order situation. On the other hand, one usually first enters the market with low hourly rates to win customers.
This is relatively normal and can hardly be avoided in some industries.
The same applies to self-employed people online. For example, those who run websites will also invest a lot of work at the beginning and earn little. This is also normal as it takes time to build a good online income.
With self-employed in the net, for example, I earned very little in the first year and only an additional income in the following years. It took around 5 years to be able to speak of a full-time income.
Therefore, especially in the first 1-3 years after founding, the subject of hourly wages should be considered in a differentiated manner.
Perspective and Development
But even if you as a founder often have a low real hourly wage, this should by no means become a permanent condition.
Unfortunately, many founders don't find a green branch even later. Many need Hartz IV or are simply generally below the planned minimum wage.
Of course, that shouldn't last. In the future, self-employment should offer the potential to make a living from it.
If you are self-employed, do everything yourself, bear the risk and usually work more hours than many employees, you shouldn't belong to the low-paid in the long run.
At least if you start your own business of your own free will and want to do so, a positive development must be foreseeable. However, it is important to check this as early as the start-up project and to realistically assess the future potential.
Of course, this includes first of all a fundamental rethinking of wages/salaries towards sales and that as a self-employed person not everything that comes in money belongs to.
And if you find after a few years that things are simply not going up, you should consider changing your career. In any case, one should constantly analyze how the financial development is and what can be done to increase the income.
Conclusion
The subject of hourly wages is certainly not an easy one for the self-employed. The prospects are not rosy in every self-employment and for some, self-employment that is not going so well is always better than unemployment.
A lot of “new” offline self-employed people (often by necessity) are just getting by and have little influence.
Nevertheless, many self-employed people also have financial problems because something went wrong with the planning and calculation.
I can therefore only advise young founders to check their financial perspective right from the start and to be careful when making calculations.
Your Experiences
How are your experiences with the real hourly wage?
How did it go at the beginning, what mistakes did you make and how did it develop?
Post a Comment