Contractor fees for full-time role

[Brookman42]

I need some advice if possible.

I worked for a company as an employee for 3 years. In 2023 I quit because my mum has dementia and I wanted to spend more time with her. I decided to become a freelancer and my boss hired me to work 3 days per week doing some of the things I did in my job. We worked out a rate of £25 per hour as it was equivalent of my salary. I know now that was cheap, but I was in a bad place and just needed to be with my mum without going broke.

A year down the line, that company got bought out and I ended up being brought back into working 4/5 days per week as a contractor. I now oversee 4 brands, not just 1. I pretty much get treated like an employee - they dictate meetings, set work, I cover work for people who go off on holiday - I just learned today about IR35. I'm also still on the same rate.

I'm now about to email the owner and say that I am now re-doing my rate so it's in line with standard contractors for SEO/marketing/web design. I also never had a freelance contract so I'm going to get that put in place to (no more covering for other people, I set scope of work so no more surprises, I charge them for no-shows at meetings). I feel like he is going to have a total canary and I am at risk of losing this job - but I'm at the point now where this needs to happen and the outcome will be what ever is meant to be.

Now normally my standard hourly rate would be £50-£70 depending on what I am doing. This however, tends to be short jobs, not jobs of 12+ months.

I'm also going to suggest a retainer as an alternative (6-8 days per month for example).

I'm just wondering if anyone had any advice about whether I'm going too high or too low. Right now, I'm not making enough to add to a pension or save for holiday pay - that I need to change!

 

[Porky]

So if i understand this you are currently offering services to a company as a freelance contractor and charge them £25 per hour for the work you do.

You think you are worth £50 per hour so want to demand a higher rate.

We have no idea if you are worth 50p an hour or £500 an hour. We have no idea if the business can afford more than £ 25 per hour or if the business can find another contractor to do the same work for the same rate or tender for a better rate.

If you have decided that you no longer wish to continue providing freelance work for £25 an hour that is your choice.

You need to be clear that as a freelance contractor you are providing adequate notice that your rates from x date are increasing to the new rate of x per hour.

They can then advise if they can afford to retain you at your new rate or if they need to find an alternative freelance contractor.

At the end of the day, its totally your choice if you want to work for the current freelance rate or not BUT also respect that they are under no obligation to use your services after the new date at a higher rate. Just because you think you should be paid more, doesnt mean a) you are worth more or b) they can afford more - its very tough for businesses at the moment.

My advise to you would be to see if you actually can secure a better freelance rate elsewhere first. If you can then you have a fall back option if the firm is not in a position to agree to your increased demands going forwards.

Good luck

 

[Mark T Jones]

The big potential challenge you have highlighted is whether you are actually an employee or a contractor (that's not a decision for you or them to make, it's defined by the way you operate)

But as @Porky points out, a 'reasonable rate' is something that has to be agreed between you, not something anyone can advise on.

Before you go into discussion, look at what others doing similar roles are being paid (within the businesss, or in other businesses)

What is the value you bring to them? How easy/difficult is it to replace you?

 

[fisicx]

Your SEO web design role can be replaced in an instant by the business. As a contractor your rights are zero. Which means you can ask for more but end up out of work.

I’d be looking for a new gig elsewhere at better rates.

 

[Newchodge]

The big potential challenge you have highlighted is whether you are actually an employee or a contractor

^^^^THIS^^^^

From your description you are, very clearly, an employee. Your employer is breaking the law, and so may you be. You should have received holiday (an sickness) pay, you should have been paying PAYE and employee's NI (which you may have paid via self assessment, but it is still inappropriate). Your employer should have been paying employer NI.

I suggest you start by discussing the way in which they require you to work - which is not how a contractor works, and how you wish to work in the future. If they don't like that idea, you may want to discuss recovering the statutory pay you have not received to date.

 

[GLAbusiness]

As a data point:

I have a standard day rate
Every April I increase that by average of inflation and wage growth
I offer a discount based on usage. e.g. 10% if they use more than 50 days in a 12 month period
I am open to a negotiated fixed price for a well defined project
I cover all my own travel and subsistence which means I am not subject to the client's normal employee rules.
My contract has all the usual terms to prove IR35 does not apply.

As to your actual day rate I have no idea what the market rate is for your skills and experience.