Freelance Does Not Equal Employee

As a freelancer, you’re often a price taker rather than maker. But that doesn’t mean you need to sell your soul to the lowest bid.

 

Earlier this week the trade union I’m a member of, the Media, Entertainment and Arts Alliance, released it’s recommended rates for freelancers. These aren’t law in the same way as minimum wages laws or award rates are in some jurisdictions. They’re indicative of the rates a freelance journalist ought to charge in order to make a decent living.

For writers, they suggest the following rates.

  • $911.00 per day
  • $607.00 per half day (based on charging 2/3 of the day rate)
  • $227.00 per hour
  • $925.00 for 1000 words or less (and then 93c per word)

The rates are similar for editors, proof-readers and photographers.

The assumption that these rates are based on “what a freelancer would need to charge to earn the same income as a mid-level journalist working on a metropolitan daily newspaper”. The mid-level journalist they have in mind gets paid about $70,000AUD per year. That includes super-annuation but I’ll work on the assumption that freelancers are contributing to their own super-annuation fund.

Let’s break that $70,000 down.

  • There are 365 days in year.
  • Weekends – 104 days
  • Public holidays – 10 days
  • Sick leave – 10 days
  • Annual leave – 20 days

That leaves 221 working days in the year making the mid-level journalist’s day rate $316.74

It’s not looking like the MEAA’s suggested rate of $911 per day is at all reasonable.

The MEAA also includes in their suggested rate “reasonable out-of-pocket expenses” such as travel costs, telephone, car mileage, fax costs (really – people still fax?). Even if I allow $800 per month for those things (that’s based on looking at my own expenses so I’ve added insurance and a few other bits and pieces) that’s only about $40 per working day.

I’ve written before about setting a pay rate. Advice like the MEAA’s rate card is useful but it needs to be tempered with reality. Even allowing that the real cost of a full-time employed is 1.5 times their salary (allowing for on costs such as a computer, etc), the MEAA’s rate suggests an annual salary of just over $200,000.

With all that said, I’m a self-employed contractor because I like being able to work flexible hours, dress in whatever I fee like much of the time, sneak out in the middle of the day for a tennis lesson, lunch or whatever I want. However, I expect those things to come at a price.

The MEAA’s rates aren’t realistic. You’re better off setting your own goals, working hard and enjoying life. If you can’t make it work as an independent freelancer (and it’s not for everyone) then perhaps the safe $70,000 per year job is what you want.

4 thoughts on “Freelance Does Not Equal Employee”

  1. Hi Anthony,
    As always, an interesting assessment of an issue so often discussed by freelancers. But I don’t understand why you’re subtracting sick leave and holidays – these are paid days included in making up that staff journo’s rate.
    That of course reduces the daily rate even more (to about $270, or $36 an hour), but then you should probably add 25% as a casual shift loading to compensate for not getting that holiday/sick day pay (although this is still in accurate as a regular casual still gets super, but you’re using a rate that probably includes super as part of a package – I don’t know many Grade 5 rates that are that high without super).
    I always understood the logic behind the MEAA’s rate assessment was ‘how much do freelancers have to charge to get a pay rate similar to a Grade 5 journo on staff’ – and then assume a Grade 5 writes about 2 x 1000 word articles a week (again not realistic in my experience but they’ve got to start somewhere…)
    I suspect there is also an element to their thinking that if you drop freelance rates below a certain level there is a danger freelancers will be too attractive to employees, who’ll be saving all the extra staff costs, so you’re undercutting staff conditions, which isn’t exactly an ideal stance for a union to take.
    Jane

    1. Thanks Jane

      That’s another flaw in the MEAA’s model. Two 1000 word stories per week is unrealistic. When I’m working, I’d do 2000 – 3000 words per day.

      My view is that the MEAA ought to focus on teaching negotiation skills and how to calculate the rate that works for you. I think those skills would be of greater value to freelancers than a rate card that is unrealistic.

  2. I also think you have to reduce available working days yet again for all those things f/lancers have to do that staffers done. Namely, chase invoices (incredibly time consuming, especially with the wrong publishers and we’ve all got one or two of those) and pitching. Which ups the necessary day rate to balance it all out.

    Oh, and for what it’s worth I did a lot of faxing when filing stories and paperwork from overseas. I don’t think the MEAA were suggesting it’s common, just using it as an example.

    1. Thanks Kate.

      Many HR studies suggest that the real cost of an FTE is about 1.5 times the fulltime salary. So, a $70K staffer might cost as much as $105K. So, even if I apply that as the base salary I still don’t how the $911 makes it as a day rate based on the MEAA’s $70K per year and 2000 words per week.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.