In this blog we dive deeper into the hidden costs that every self-employed person should include in his or her calculations. Because a healthy business doesn't just mean securing enough assignments, but also being financially future-proof.
The costs you easily overlook
When you set a rate, you might initially think: "How much do I want to earn per hour?" But if you base your rate on a salary from employment, you make a dangerous error in thinking. Employees, besides their pay, also have holiday pay, a pension scheme, insurances and social security. As a self-employed person you must cover these costs yourself.
For example, think of:
Insurances: AOV (occupational disability insurance), professional liability insurance, legal expenses insurance.
Pension accrual: In salaried employment, often 10-15% of your salary is reserved for your pension. Do you do that too?
Taxes: VAT remittance, income tax, entrepreneur's deduction (which will be phased out again in 2025).
Unpaid hours: Acquisition, administration, networking, writing quotes: all essential, but not directly paid.
Training and development: How do you stay competitive in a market that is constantly changing?
When you add this up, it often turns out that you have to ask for much more than you initially thought.
Unpaid time: the silent profit killer
You may invoice 40 hours per week, but how much of that is actually billable? Time you spend on networking, social media, maintaining your website, or administration doesn't directly count toward your income.
A realistic estimate is that the average self-employed person can only invoice 60-70% of his or her workable hours. That means your hourly rate actually needs to be 30-40% higher to earn the same as an employee with a comparable salary.
Tip: Keep a time log of all your work, both billable and non-billable.
How do you calculate a healthy hourly rate?
To remain profitable as a freelancer, you must set your rate strategically. Use this formula as a basis:
Desired annual income + costs + buffer for slower months ÷ billable hours = your minimum hourly rate.
And that's still without pension contributions or extras. Many freelancers who actually calculate their rate end up higher than they thought.
Tip:Use tools such as zzp-tarief.nl or the KvK's calculator to calculate your minimum rate.
The right mindset: think like an entrepreneur
Many self-employed people still hold an 'employee mentality' and compare their rates to what they earned as salaried employees. But as an entrepreneur you must look beyond just your monthly income.
Dare to negotiate– You deliver expertise and value, not hours. Customers who look purely at the price are often not the customers you want.
Take into account rate increases – Costs rise every year, so your rates should do the same.
Make sure you have a financial buffer – Allow for a buffer for slower months, illness or unexpected costs.
The most successful freelancers are not those with the lowest rate, but those who know their worth and pursue a financially healthy strategy.
Do you, as a freelancer, not only want to be successful today but also remain financially healthy in the future? Contact us via the contact form and discover how we can support you!
