Recently we made one analysis of freelance Excel work hourly rate based on statistical data on websites freelancer.com and upwork.com. We made one simple data Table and tried to see how freelancers usually charge their work on freelance websites.

Freelance Excel work hourly rate is in the range from $5 to $50 on major freelance websites. Excel work hourly rate depends on Excel job type, industry, and country of investor and freelancer.

Excel job type can be related to data and data entry, features engineering, data preprocessing and in that case, freelance Excel work hourly rate is from $5 till $25. If you have VBA programming, coding, macro creating than freelance Excel work hourly rate is from $10 till $50.

The industry has an impact on a freelance hourly rate. The banking industry and machine learning industry have the biggest hourly rate from $20 to $50. Employers from this industry usually pay higher rates.

Freelancers from the USA, Canada, Australia, Japan, West Europe have higher hourly rates (even 50% to 200%) because of a higher standard of living in their countries. This is usually the opportunity for other freelancers to offer lower rates. However, employers from richer countries have just 15% higher rates when we compare employers from the poorest countries.

Major freelance websites have more than 80% of all active freelancers from the “poorest countries” because richer countries freelancers avoid low rate competitions.

Here are major stats:

Freelancing and Tax Return: What You Needed to Know

Most people believe that a freelancer does not have to deal with taxes mainly because their job description is different from a standard entrepreneur. However, this is not the case. So, to answer the question – Do freelancers charge tax? Yes, such a self-employed individual is required to properly be in compliance with all tax regulations laid down by the State in which he/she is operating.

But as a freelancer, you can reduce your tax bill and save hundreds of dollars in the process.

Even though a freelancer taxation process is not complex, still there are many individuals who have difficulties in understanding Sales Tax and Use Tax, and if they need to consider these two types while filing their tax returns. To provide a better view on the topic, what these two types mean to freelance has been mentioned next:

Does a freelancer need to deal with use tax?

This type of tax will be applicable to those tangible personal properties and/or services purchased outside the State from where the freelancer operates. So, the product/service in question should be purchased from any State other than the place where it will be used. In the case of a freelancer, use tax is also applicable if the retailer of the State from where the product/service was sold, does not collect sales tax. A freelancer also has to deal with the use tax if the sales tax in the freelancer’s operating state happens to be higher than the sales tax rate in the state from where the product/service was sold. Use tax is applicable to all freelance professionals like sole proprietors, individuals, and LLCs. Besides, they are also applicable to consumers and businesses.

Does a freelancer need to deal with sales tax?

On the other hand, this type of tax will be applicable on retail-sold tangible personal property and/or services. Just in case of use tax, a freelancer also needs to file sale tax returns if the freelancer happens to collect sales tax. So, if you are collecting sales tax and/or use tax, then you need to get a sales tax license/permit as well. When a freelancer applies for the permit, he/she also gets a sales tax identification number depending on the State from where they will be operating.

Factors affecting use tax and sales tax for a freelancer

As these two types will be applicable to a freelancer, he/she must get familiar with the different factors affecting both of these taxes:

The state where the freelancer will be operating from will affect the sales tax and use tax for the individual. Tax regulation will vary from one state to another.Having a sales tax exemption certificate is also another factor. Based on the state you are operating from; the certificate comes into effect when the final product/service sold is subjected to sales tax. In fact, in most cases, the seller should have a Certificate of Authority if he/she wants to accept the exemption certificate. The type of product and service that the freelancer is involved with will also come into play in case of sales tax. Such type of tax is only applicable to tangible goods and services. However, the list may differ from one state to another.

Besides these, there are many other factors that can affect both use tax and sales tax for a freelancer. Knowing and understanding these factors will provide you with the insight that can help you to handle the whole taxation procedure more effectively and accurately.

Tax deduction in the USA for a freelancer based on IRS are:

Advertising and marketing
Computer equipment and software
Office supplies
Home office
Utilities
Travel and business meals

In the rest of the world (EU for example) freelancers have 5% to 15% smaller taxes than other LLC companies.

As a self-employed individual, the whole taxation responsibility falls on the freelancer which can be overwhelming. Thus, it is advisable that you get professional help to have a better grasp on the whole thing, and most importantly, to file and submit the related tax documents accurately and timely as per your State’s tax guidelines.

How to Buy a House as a Freelancer

You may be here because you have successfully built your freelancing business and now you want to make your living more secure by investing in a house. It may sound easy but you may have to face many problems in order to get your dream house. One of the biggest problems is the freelance mortgage.

As you are a single owner of your business you don’t need to get a surprise about this. Many individuals do not have any idea how to deal with such situations but you can relax as you are not one of those because we have got you covered.

In this article, we have listed down some valuable advice that you can follow and get a mortgage. By the end of this article, the troubling question about how to buy a house as a freelancer will be cleared from your mind.

1. You will need 2 years of tax returns

In order to get a mortgage loan from the mortgage lender or bank, you will need to have at least 2 years of tax returns. This will show how you have generated the income from your individual business.

Along with that, it will show that you are credible and will be able to afford the mortgage payment in the following years as well.

You can even opt for a cosigner. A cosigner is someone who will help you obtain loan terms and they can also help you to increase the amount of principal that you can receive.

2. Ask your lender to average the yearly income

In the pre-approval stage, you have to be clear on numbers that your lender will generate the mortgage. Usually, mortgage brokers average the income that you have on the file (in this case 2 years). But, sometimes they could use that number which is the lowest.

If there are particular reasons why your one tax return is lower than others, just explain it to them. Your reasons could be any – sudden changes in the family, maternity leave, or any other major life-changing event. Just explain it.

3. Your savings could come in handy

If you have accumulated money that you can give as a down-payment, this could be very beneficial for you. How? Making a heavy down-payment is a sign that banks and other lenders will notice and will excuse you for your fluctuating income.

4. Keep your credit score in check

Excellent or even good credit score can be very beneficial for a freelancer while hunting for a loan. This will prove your financial management and stability with your lenders.

One thing that you need to quickly take away is – try to expand your credit score as much as you can prior to seeking a loan. You can build up by applying for a fresh credit card if you don’t have one, paying bills off on time, keep the balance low, etc.

5. A tax deduction can haunt you

Tax write-offs can be both a curse and a blessing for a freelancer. There are some advantages to writing off some business expenses like office supplies, monthly rent for the home office, software subscription, etc.

Tax write-offs, however, can affect your mortgage loan, as if there are more tax write-offs, the income on the paper will be shown less.

Final Words

Buying a new house as a freelancer could be an intimidating task, regardless of your job and earnings. You will have to show your achievements and records to the money lenders and banks in order to get a loan.

On the flip side, if you will see, there were few tips that could seriously come in handy and make your overall house hunting less daunting. I hope you find these tips valuable and use it wisely to get your dream house. Good Luck!

Do you know your freelance rights? Freelancers are independent workers, and they have some rights, which protect the client from controlling their behavior and financially. The freelancer can object if the employer tries to control them, and they can inform the client that there is a difference between an employee and an independent worker which is acknowledged by the IRS and department of labor. Even if the employer has signed an agreement with the freelancer, the freelancer will continue to retain his rights. For freelancers who are not sure about their status, or wish to claim that they are employees, they should contact an attorney. All rules are listed on the IRS website.

Freelancers rights

– Freelancers can work wherever they want, they are not required to work at the client’s office for some hours. However, the freelancer may have to attend meetings, events or make presentations as specified in the contract

– Freelancers can work whenever they wish, the client cannot stipulate that he works for a specific number of hours in a day or control the time schedule

– Since freelancers are hired for their existing skills, they decide how they will complete the work assigned, the steps taken and equipment which will be used. The client will not train the freelancer, though they may provide guidelines for the work and indicate what they expect. The client will not control the work process.

– Freelancers can take additional clients if they wish to. Freelancers are free to market themselves to prospective clients and get more orders, the client cannot prevent the freelancer from working for a competitor. The client may specify that the details of the work done by the freelancer for them are not discussed with, others, by having them sign a non-disclosure agreement.

– The freelance work may be subcontracted to others, without informing the client. If the freelancer has many orders or feels that some part of the project may be completed better by another freelancer, he can subcontract part of the order to another freelancer if he wishes. The client can specify the end product and its quality, the freelancer will not specify the process used by him.

Other rights specified in the contract

– Intellectual property rights: The freelancer should always grant the client the least possible rights to the intellectual property (IP) since the IP may be profitable in the future. Contracts which specify that the freelancer should give up all rights for the future should be avoided.

– The freelancer contract should specify how much he should be paid, either hourly or for the project and when the payment is due or payment schedule. Specifying a late fee, usually 1.5% interest can help ensure prompt payment.

– The freelancer should also specify the kill fee or early termination fee in the contract. This is the amount that the client will have to pay the freelancer if they terminate the contract early. It is a very effective way to protect the freelancer from clients who cancel projects or change their requirements.

– Freelancers have the right to offer a reasonable number of revisions for free, and then charge for each additional revision. It is not advisable to spend more time, the effort for only a few clients, the effort will depend on how much they pay.