Source
r/graphic_design•
campfuture

Pay cut for going from freelance to hourly?

Asking Question (Rule 4)

I have been freelancing for another designer for the past few months. Recently, he offered me a part time position, which is what I’ve been looking for. But the pay rate is 50% less than I am making as a freelancer. Is this normal? I assumed it would be less because he will be paying half my employment taxes, but it seems like a major cut to me. How do I negotiate a higher rate while not souring our working relationship?

Posted Sep 7, 2023, 1:45 PM UTC

110
CountryCat•

Am I understanding this correctly? He wants to make you a part-time employee and reduce your effective hourly rate in half?

Will you be getting benefits? Health insurance? PTO?

1
campfutureOP•

That’s correct. We haven’t discussed benefits yet, but that could be part of the negotiation if I do accept the lower rate. I feel it probably SHOULD be, since I’ll be paid 50% less

1
mikey_the_kid•

Might make sense if you were on salary to go from something like $80/billable hour freelance to $40/hour 9-5 (with some type of utilization factor assumed by the employer).

It’s about risk/reward: If you are just creating/producing and don’t have responsibility in finding work and managing cash flow then it can make sense to reward the studio for finding that work and paying you a consistent amount every month/week.

If it is hourly, then I don’t agree with this, as you are sharing in the risk that work won’t be found. The employer share of payroll taxes (at least in the US) is 7.65%, but there is also workers comp insurance, health insurance (if offered), and PTO to consider in the overhead cost to the employer.

1
campfutureOP•

Thanks for laying it out. I didn’t consider the worker’s comp costs. The benefits have yet to be discussed… It’s true, I don’t have to go out and find clients. I’m considering accepting the rate and renegotiating in 6 months

1
mikey_the_kid•

Worker’s comp is not expensive, but it is an additional cost.

1
Anonynominous•

Not having to find clients is definitely one of the main benefits of working for an agency or just as an in-house designer for one brand. It’s always much easier. Freelance is great until you realize how much work it is sometimes to find clients. And when I’m not looking for clients or working on a project, I’m doing all the organizing and planning of current projects. It’s hard to get into the flow where you’re actively looking for new clients even if you have ones already. That’s what I’m struggling to change right now. New projects consume all my energy so I’m not doing anything else, but I’d like to dedicate time everyday to finding new clients. It’s just a lot of work

1
spicy-mayo•

You'll never get a permanent position at a freelancer rate. How many hours do you work now vs how many will you get going to this change?

1
campfutureOP•

I’ve been working about 10-15 hours a week, rather inconsistently. This job would offer 20 hours a week at a salary rate — which also concerns me, given that during a busy week I may have to work over 20 hours… and I assume not be compensated since it’s salary?

Lots of question marks… I suppose it boils down to the individual but I wanted to put some feelers out for what’s normal/acceptable

1
mikey_the_kid•

Sounds nearly like salary non-exempt work to me, so you would likely be eligible for at least straight time over 20. You should definitely iron out that point prior to signing.

1
CountryCat•

Looking at your answers here, I would find out exactly what your total compensation and benefits will be. Also find out what your hours and overtime (if any) look like. From there you can make an informed decision.

1