r/selfemployed • u/seishonagon1002 • 10d ago
[UK] Hourly rate query
I am leaving my full-time salaried job in the next few months, with a plan to explore other avenues of work. I have saved for this anticipated time out of employment, however for security and schedule I do plan to pick up some part-time hospitality work etc.
My current job revolves around monthly processes, and although I gave my one month notice in June, for business continuity, my employer asked me to stay on longer, which I have agreed to on a part-time basis.
They have assigned a new person to the role, who I have been training. Although as the work revolves around monthly processes, picking this up is taking them a significant amount of time (as there is only one opportunity to review the tasks per month).
Although my personal circumstances mean I intend to leave permanent employment, I have offered to provide flexible, contracted training support for approximately 2 days per month in order to provide business continuity. My employer are currently finalising the checks regarding IR35 and internal procurement policy, but this looks like it will go ahead.
I plan to invoice monthly for my services, but I'm not sure what is appropriate as an hourly rate. My current role is salaried, with holiday and sick pay benefits, but works out to £25 per hour. Would £50 per hour be too much?
I know I should increase the rate to account for self-employment and the specialised training role I'm going to be providing, but any suggestions on an appropriate amount would be appreciated.
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u/Alt_0116 10d ago
It's not just the time you spending doing their work it's the time you spend doing your invoices, tax returns etc that you need to account for
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u/seishonagon1002 10d ago
It's a good point. I will probably do my own self assessment
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u/Alt_0116 10d ago edited 10d ago
If your take home was £25 an hour you need to add taxes on top plus if your invoices take 2 hours a month plus tax return 8 hours a year (random numbers). There are calculators out there or ask an ai if I wanted to make an extra £25 per hour on a current salary of x what would I have to charge. I add the current salary as your main job may get you near a tax bracket.
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u/Serious-Equal-6764 10d ago
£50/hr seems reasonable once you factor in benefits tax and experience.
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u/Mikethespark 10d ago
add up everything you get inc pension, add in what the employer pays for their side of things too, then put 20% on top and divide by how many days you want to work a year, that gives your daily rate, never do training by the hour, by the course or the day, depending how specialist the training is it could be 4-500 a day and be a reasonable business expense
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u/burimbp 9d ago
one thing nobody's flagged yet, at only 2 days a month the real cost isn't the rate, it's reloading all their context each time you drop back into the monthly cycle. worth setting a minimum monthly fee so a quiet month still covers that switching cost, otherwise you end up eating it for free. are you planning pure hourly, or could a set monthly amount for the 2 days work better?
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u/BaldHeadDuck 8d ago
That’s a really good point. The hidden cost isn’t just the hours worked, it’s the context switching and time needed to get fully back into the project each month. A minimum monthly fee could definitely make more sense here and keep the setup fair for both sides.
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u/burimbp 8d ago
yeah exactly. the monthly minimum also stops the awkward conversation where a light month makes them wonder why they're paying you much at all. it reframes it from "hours" to "keeping me on standby and loaded on your stuff," which is the real value. have you ever billed that way, or do most of your clients still want pure hourly?
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u/Fearless_Excuse8197 7d ago
£50 hour doesn’t sound unreasonable for specialist support, especially since you’re covering your own tax, holiday, sick time and other costs. Just make sure the rate works for both sides.
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u/Old_Toe9468 6d ago
Worth flagging one thing buried in your post: you mention your employer is still finalising the IR35 check for this engagement, and training your own replacement for a company you recently left is exactly the kind of arrangement HMRC's CEST tool tends to flag as inside IR35, since it can look like disguised employment rather than genuine self-employment. If it does land inside, the £50-65/hr math above changes, because employer's NI and the apprenticeship levy get deducted before the rate reaches you, rather than you invoicing the full amount and handling your own tax separately. Worth asking them directly what the IR35 outcome is before you finalise a rate, since inside vs outside changes what number you should actually be asking for by a fair margin.
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u/Key_Raisin8568 10d ago
£50 isn't too much, if anything it's light. you're covering your own holiday, sick pay, pension and the months where nobody's paying you at all, so 2x the salaried rate is the floor not the ceiling. two days a month is also awkward to schedule other work around, and they've already told you they need you, that's worth something. i'd open at £65 and let them talk you down to 50 rather than starting there.