I posted this presentation a few months ago. It answers the question that everyone asks... who is more expensive freelance or employees Please offer your comments...

1. Freelance vs. Permanent Staff

2. Introduction
This presentation aims to dispel the myth that freelancers cost more than
permanent staff…… The truth is quite surprising…..calculators at the ready

3. Average Salary
First of all lets look at the average salaries for a freelance senior planner against a
permanent senior planner. I have used the West Midlands as the example as this is
the market in which we operate
Freelance Senior Planner Permanent Senior Planner
£400 per day or £92,000 per annum £65,000 per annum
• Freelance yearly salary based on 46 working weeks, 5 days a week at 40 hours
• VAT has been excluded as this is re-claimed by most companies
• Agency fees have been removed as they vary and the both staff may be directly procured

4. Permanent Staff Cost Base
Senior Planner
• Salary £65,000
• Company Car £7,000
• Fuel & Expenses £5,000
• Pension Contribution £6,500
• Sick pay (average 1 wk per year) £1354
• Private Healthcare £600
• Employer’s National Insurance @ 13% £8450
Total Cost £93904
• This is £1904 more expensive than the freelance senior planner

5. Freelance Staff Cost Base
Senior Planner
• Salary £92000
Total Cost £92000
• This is £1904 less than the permanent senior planner

6. Downsizing
Every business experiences peaks and troughs in workload, therefore occasionally
the tough decision to downsize has to be taken.
Below we show the expected costs for freelance & permanent Senior Planners:
Freelance Senior Planner Permanent Senior Planner
1 weeks notice = £2000 4 weeks notice = £5416
Employers NIC = £704
Total: £2000 Total: £6120
• It costs £4120 more to downsize with a permanent members of staff

7. Conclusion
As stated in the first slide, permanent staff do cost more than their freelance
counterparts, if you factor in all the benefits available to permanent, otherwise
accounted for as overheads to permanent staff rather than just concentrate on the
salary
The question you may ask is, “why do freelancers not become permanent staff?”
the answer to this is simple… freedom. Freelancers can choose just about
everything they want to do, be it location, company and type of projects. They also
enjoy the tax breaks that come with being a small business owner.
However it is not plain sailing, to enjoy the freedom and the tax breaks our
freelancers are exposed to a lot of risk, as with all small business owners. Even short
periods off work can put incredible pressure on a freelancers life, whereas the
permanent members of staff will enjoy the security and protection which their
employer will provide for them as part of their benefits.