Am I charging enough?
I am a self employed small business admin assistant and I was hired by a cleaning company to basically run the entire business but when people have found out how much I charge they think I’m short changing myself so I thought I’d ask for some opinions…
For this cleaning company I do the following:
- Accounts receivable & payables
- All bookkeeping tasks
- Filing and paying of all company quarterly taxes & I work with a tax professional gathering what’s needed for yearly taxes
- I do all contracts, price negotiations, vendor account set up and property viewings
- Scheduling of services
- Maintaining all company insurances
- Employee records and new hiring onboarding
- I’m the main point of contact via email and phone
- I create spreadsheets for monthly budgets and monitor all bank accounts to make sure the company is on track
- Any errands needed for the business and owner
- All mail correspondence
- Keep the office stocked and inventory tracking
I work about 4-5 hours per day 5-6 days per week but I’m always on call for whatever the business or owner needs. I currently charge $850.00 per week and I’m in in the state of Arizona and file my own taxes as I’m a 1099 contractor and not an actual employee.
I look forward to your opinions on the matter and thank you in advance!
You can try to use AI Automation instead or with your employees so you can reduce costs and quiet your mind
Let me know if you’re interested in some startup capital to start your own cleaning business… I’m only half joking, you’re running the business, you should be the owner
This one’s a little tricky because you’ve got a couple of issues going on. First is you’re probably misclassified as an independent contractor and second is whether you’re underpaid.
If you simply did just the bookkeeping for them, then that might pass as an independent contractor. You’d provide this service to this company and other companies, having discretion of when and how you work. All the other stuff is basically a W2 employee, like an office manager or admin assistant. This ties into the second issue of compensation. As a 1099 independent contractor, you’re keeping less of your $850/week than as an W2 employee because you’re responsible for self-employment tax.
Compensation wise on the surface, it doesn’t seem that bad if you’re making $44k/year in AZ working only 4-5 hours a day. It’d be a great salary if you had a full 40 hour work week. If they made you a W2 employee, they might want to pay you less because now they’re responsible for payroll taxes, insurance, and benefits. If you were truly a 1099 independent contractor, you could take 15 unpaid days off any time you want to travel, but they probably won’t let you do that, hence you’re truly an employee. As a W2 employee, you’d be getting PTO, sick days, and more protection from being let go.
You are missclassified. It’s not up to the business owner to decide how to classify you. The IRS has a document with a checklist that determines whether an employee should be classified as W2 or 1099, and you do too many things and are too tightly integrated into the business to be 1099.
As to whether you are underpaid, I think you probably are, but it all depends on whether you could get another job for more money. Fair compensation is a question for the market. I would recommend you polish up a resume and apply to sime similar jobs in your area to see if you could get a better offer, then use that to negotiate a higher salary. You also need some boundaries around time off. You should not be taking work call on vacation. I am the owner of my company, and I do not take calls on vacation. Everyone needs time off where they can recharge their batteries.
If you have the desire you could do as others have suggested and start your own company. You could make more than you do as an employee. You could also lose everything, so consider that move carefully. I’ve been self-employed for almost 10 years, and I am the first to say it is not for everyone. If you do, I would consider staying a bookkeeping business, rather than a cleaning business, as it sounds to me like your skillset might be more aligned with that.
This is easily over 100k in remuneration.
I’m more and more amazed as the duties kept going on. You’re a full time accountant, manager, and customer service rep, and yet you still get paid as if you were just a part time employee. It doesn’t matter if you only work 4-5 hours per day; charge people for your expertise and experience, NOT the actual quantity of work.
You’re essentially working as if you own the business without any of the benefits of actually owning the business
Cleaning co owner here.
- Your charging too little +You should not be a 1099 contractor. You’re function is equivalent that of Office Mgr, GM, Head of Operations… Basically you do everything except physically clean.
Based on all that you do in 4-5 hours, you’re an incredibly efficient at what you do. Your weekly pay should be ~$1,200 - 1,500. w/taxes withheld, PTO and 401k etc.
The only reason she could be 1099 is if she is also working at other companies as well doing the same duties.
Potentially. However, if OP is working in their office space during defined work hours, using the company’s resources, and based on the tasks OP performs, there’s little that suggests she contractor.
Per IRS guidelines, there’s practically no gray area between Employee and Contractor.
I changed the status of my staff for that very reason. They were mis-classified for the benefit of the previous owner to avoid fed withholdings and state employment taxes.
First off, I do believe that she is an employee, not a contractor but a contractor can use onsite if they also maintain their own worksite as well for other work.
The big test would be is if she is exclusive working for them or does she work at other companies doing this same work. She might do 4-5 hours at this job, 1-2 hours somewhere else.
this is a hiring opportunity for you, if it’s real, tbh
Our business manager is making $48/hr as a W2 employee (albeit in the SF area). You should add 50% to a reasonable hourly rate if you are a 1099 to account for taxes, insurance, overhead, etc in Arizona I’d hope that you would be making 30-35/hr after taxes at least, so billing 45-50/hr. I think $1250-1500/week is probably where you should be. A good admin person is worth it and saves money in the long run.
You should be charging at the very least, double that much.
I do all that for my own company - i know how tedious it is Thats roughly a 70K job on avg
To add more- the fact it takes u 4-5 hours a day Its on you Someone else can maybe do it in 10 Hours a day You charge based on your skills and what you bring to the table
You should negotiate being a FTE for at least $85k per year.
If they say no, I would quit immediately and open your own cleaning business. You know how much to charge and what to pay employees, as well as having the full client list.
Basically, you know exactly how much you would be earning as the business owner and would effectively have zero additional work compared to what you do now.