One of the major reasons would-be copywriters and copywriters who are working a full-time job don’t go freelance is because of benefits. The common misconception is that as a freelancer, you don’t get the same benefits as an employee. And that’s just not true. The truth is, you have to build those benefits into your rates.
And, while that may seem daunting, actually gives you much more control over your income and where you spend it.
See, what your employee doesn’t tell you—and what most people overlook—is that the company is factoring in all those benefits (and the cost of those benefits!) into your salary or hourly rate. That’s just one of the reasons on-staff copywriters typically make less per hour than their freelance counterparts.
But what if you don’t want that $300/year gym credit or you don’t want to be on your employer’s healthcare because you’re on your spouse’s? That doesn’t change what your employee pays you.
As a freelancer, you have the flexibility to build your benefits package how you want it.
Read on for some of the most common benefits and how to build them into your freelancing rate.
Healthcare Benefits as a Freelancer
For most US-based copywriters, figuring out healthcare is often the most daunting of all the benefits. Where do you begin? Can you afford it?
The best place to start is healthcare.gov. From here, you can select your state and get taken to the right place to explore plans and costs for your state. Most states have an estimate tool that you can use to see if you qualify for any savings on your monthly cost.
Take the time to research your options and see what coverage you need for your specific situation. You can do this long before you even decide to go freelance! Digging into the options and numbers will start to dispel the fear of the unknown.
Most freelancers can also deduct healthcare expenses from their taxes. Check with your tax preparation professional to make sure you get this deduction if you qualify.
Vacation Time for Freelancers
The biggest misconception people have—including working freelancers!—about vacation time is that taking time off means time you’re not making money. On the surface this is true: if you don’t work, you don’t get paid as a freelancer. But this is where knowing your numbers is crucially important.
You get PTO (paid time off) at a company because the organization is factoring it into your salary or hourly rate.
So, you’ll do the same thing. Comprehensive Copywriting Academy students know that there’s an entire course on pricing in the CCA. As a very, very basic starting point, do some research on salaries for copywriters in your area and at your level of experience. This will give you an idea of common annual salaries. But, if you want to make more, great!
With this number in mind, divide it by the number of weeks each year you want to work. Give yourself at least two weeks vacation. The benefit of being freelance is you can build in your vacation time when and how you want. If you want four weeks, great! Then divide that number by the number of hours in a week you want to work.
Play around with these numbers! See what happens if you work more. See what happens if you work less.
Of course, ground your numbers in reality. If you want to make $100,000 a year, it’s absolutely possible. Can you hit that number working 5 hours per week with 6 weeks vacation? Not likely as a one-to-one service provider (e.g. one copywriter providing services to a handful of clients).
How Freelancers Can Plan for Retirement
Yes, some companies offer a 401(k) match. But freelancers have a huge advantage over full-time employees when it comes to saving for retirement.
If you are running you copywriting business yourself (as in, you don’t have employees), you can open up a self 401(k), sometimes called a solo 401(k), self-employed 401(k), or one-participant 401(k).
The huge perk for freelancers is you can contribute as the employee and the employer. As the employee, it’s very similar to any other 401(k): you have a maximum limit you can contribute each year ($22,500 for most plans in 2023; check since contribution limits can change from year to year). You must contribute by the end of the calendar year.
As the employer, you typically have until you file your annual taxes to make the employer contribution. Your employer contribution is a bit tricky, so ask your tax preparation professional to help you understand the limit of what you can contribute as the employer of your business. It’s based on your “earned income,” which is defined as net earning minus one-half of the self-employment tax and contributions for yourself. (The IRS explains how to do the math here and gives examples here.)
The benefit of this? If you make a lot of money in a given year, you can decide to contribute more to your retirement accounts and lower your taxable income.
Educational Benefits for Freelancers
While some employers cover all or part of the cost of advanced degrees for their employees,
But freelancers do have the perk of being able to deduct certain educational costs from their taxes.
Additional Freelance Benefits
There are, of course, tons of benefits of being a freelancer that on-staff workers typically do not get. Here are just a few of them:
- Your rates. As an on-staff employee, your salary is your salary. You may have a conversation with your boss each year, asking for a raise. Or maybe the company adjusts your salary 3% to keep up with the cost of living. As a freelancer, you can decide to bump up your rates project to project.
- Your amount of time off. Build in as much as you want and take it when you want. There’s no fighting your fellow team members for prime vacation days or being capped at two weeks. Of course, give your repeat clients as much advanced notice as possible.
- Where you’re working. Post 2020, this has become a bit more flexible as companies have realized not everyone needs to be in an office to get the job done. Nonetheless, freelancers have the perk of working from wherever they want. We have CCA students in the UK working with clients in the US; students in Canada working with clients in the UK; students in the US working with Australian clients—the opportunities really are limitless.
- Your schedule. This is also a bit more flexible post 2020, but, again, freelancers are always 100% in control of their hours. If a client asks you to take a meeting, it’s when it works for both of you—there’s not necessarily an expectation that you’re holding certain office hours as they are with a full-time job.
On Episode 49 of the Build Your Copywriting Business podcast, Nicki and Kate discuss why benefits should not be something that holds you back from freelancing (if that’s your goal). They share tips for building your own freelance copywriter benefits package—one that’s far more attractive than what any employer can offer you since it’s tailored to your needs.
Your Turn! What benefits did we miss? What additional benefits have you built into your own copywriting business? Tell us in the comments!
Note: As with anything regarding taxes, consult a tax professional. We are not CPAs or tax professionals, so use this as a starting point to ask your tax professional questions about your specific situation.
Last Updated on June 29, 2023