Freelancers: Build in your Holiday, Sick, and Vacation Time

Find quick insights to better billing for you to grow your freelancing gig. This less than 5 min read can help you raise revenue.
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Being a freelancer is awesome, except for when you’re sick or want to visit your family in Nebraska for the holidays. Many freelancers struggle with the freedom to work and the right to be paid when on vacation. So, how do you cover your own holiday, sick, and vacation time?

Freedom to Choose

One of the benefits of freelancing is the freedom to choose. You choose your hours. You choose your value. You choose when you work. For every benefit of being a freelancer, however, there is a downside. In order to build in your holiday and vacation you have some choices: define your working year and/or stop working by the hour.

Personal Time Off (PTO)

In the corporate world here in the States, often Personal Time Off (PTO) is a combination of sick days, vacation time, and time to take care of family and personal things. This usually does not include times where the company closes altogether such as the week between Christmas and New Year’s Day. A standard allotment of PTO is fifteen days, which may increase with seniority. In Europe, many corporations give up to six weeks off. For this exercise, grab your calculator and a pen and paper and choose which model you prefer.

Define Your Cost

For the sake of this exercise (you have your pen out, right?), let’s say that as a freelancer, your cost is $70,000. Meaning, if you were a company with a payroll service, your gross salary would be $70,000 or a little over $5,800 a month. (We are rounding to the nearest whole dollar.) Now, this doesn’t include taxes (that would be another blog post) but it’s a good working number.

Let’s get that into days then hours. A year has 52 weeks. Let’s presume you work eight hours a day for a 40 hour week.

$70,000 a year is $1346 a week.
$1346 is $34 an hour.

By this logic, $34 an hour is the amount it costs your company (regardless if it is sole proprietor or LLC). You can quickly see that without considering taxes or operational expenses why freelancers should be charging much, much more.

Define Your Working Year

According to the 2019 Working Day Payroll Calendar (link: https://hr.uiowa.edu/payroll/2019-fiscal-year-payroll-calendar ) there are 261 working days in the year. Though, the average is about 22 days in a month. Take that average in a year and you get 264 days.

Instead of calculating by the year (12 months with 52 weeks), we can see how much $70,000 is per working day. This comes out to $265 a day. In order to keep your salary at $70,000, you cost the company $265 a day. If you have the flu for three days, you just lost $795.

That’s a total bummer. So, let’s define your working year by reverse engineering your vacation.

Plan Your Time Off

As a freelancer, do you want to work the five days between Christmas and New Year’s Day? Probably not. I presume you may have birthdays you’d like off to spend with your family (spouse and average of two kids) and maybe a week’s vacation in Costa Rica. You may get a bad flu, too. So, let’s continue with presumptions to get a good idea.

Christmas Holiday: 5 days
Family Birthdays: 4 days
Thanksgiving: 4 days
Postal Holidays: 4 days
Costa Rica: 5 days
Flu: 3 days

This a total of 25 days you for sure will not be working during the 264 average working year. Your working year is now 239 days. When we charge $265 for 239 days we only get $63,335. That’s definitely not going to work. No freelancer will willingly take a $7,000 pay cut from himself. Let’s get back to $70,000.

Dividing the ideal salary from your new working year of 239 days is $293 a day which is $37 an hour as opposed to $34 an hour. A small three dollar increase in your cost pays for your extra 25 days.

Adjust Your Estimates

Once you know your real cost to work your ideal days, be sure to adjust your estimates regardless of whether you charge by the hour or project. Charging by value doesn’t work out in mathematics since value is a perception. However you choose to run your business, you need an 8% increase to pay for your 25 days of PTO.
Block Out Your Time

Now that you have decided the optimal PTO and know to charge 8% more to pay for the time, the remaining task is to block out the time. In your calendar, block off those times as busy. Block out the vacation to Costa Rica even if you stay in your basement and camp with your kids. Now, take those times off.

Protect Your PTO

Time off is great, unless your clients have an emergency. Set up a backup person to take emergency work;; if not an employee then a peer who you can trust. Trade off helping each other take time off. Manage client expectations by letting them know when you will be away from the keyboard. Adjust your lead times while estimating work. Client work will always be there. Your mental health will not.

Personal time off is valuable to everyone, not just corporate employees. The freedom of choice that freelancers enjoy may come at a cost, but with defined goals and a bit of calculations, any freelancer can build in personal and vacation time.

Bridget Willard

Bridget Willard

Bridget Willard is a marketing consultant who brings her teaching and accounting background together to help small businesses. She began her marketing career in construction, then worked in franchise development, nonprofits, and tech. She is especially known for her brand building for Riggins Construction and GiveWP. Bridget co-hosts WPblab with Jason Tucker — a podcast and live YouTube show on the WPwatercooler network.

Besides speaking at WordCamps near and far, Bridget has been managing the social for WordCamp LAX since 2015 and was a organizer for Los Angeles the last two years and Orange County since 2017. Additionally, as part of her volunteer work, Bridget is a Marketing Team Rep for Make WordPress.

When she’s not writing about marketing or social media, she is spending time with her Sully Dog, learning languages on Duolingo, or walking by the ocean.

Say hi to her on Twitter at @youtoocanbeguru and check out her site at bridgetwillard.com.