A self-employed hours invoice is for professionals, such as freelancers, that charge their clients on an hourly basis for their services. If using a logging or time tracking software, generate a report and attach it to the invoice for additional documentation.
Tracking Self Employed Hours
There is nothing new to professionals who charge for their services by the hour. Attorneys and lawyers have been doing it for years and continue to use this method even till today. Up until recently, tracking the hours worked by a self employed person hired for a job was no easy task. Tracking the hours relied heavily on the trust system, which is not at all that efficient. In the freelance market, there are now plenty of tools to help clients keep a good eye on their hired freelancer and the amount of hours worked.
Tracking hours of a self-employed person can only be done for those that work on their computer. For other self employed professionals, such as carpenters and painters that work in the physical world, it’s typically only possible to track hours if they are working on-site or at a location that can be observed.
Keep Track of Work Hours
Freelance websites such as Upwork offer the ability for freelancers to toggle on and off log time while working for clients. While logging is turned on, the software takes 6 screen captures per hour which allows clients the ability to see the freelancer in action working.
Clockify – Computer software that allows self-employed professionals to earn trust with clients by showing them a detailed breakdown of their work and the time spent.
Self Employed Hourly Rate and Taxes
A self-employed person’s hourly rate is calculated based off of their area of expertise, experience, and the market’s demand. For freelancers, the amount and quality of reviews received will allow that freelancer to charge more for their services as time goes on. Self employed professions are able to charge as much as the people in the market are willing to pay.
After receiving payment from a client, the self employed professional is responsible for paying their own taxes. The self-employment tax rate is 15.3%, which is a result of Social Security and Medicare taxes. Wages up to $128,400 are subject to this tax rate. Depending on the state where the self employed individual works, additional taxes may apply. Self employed professionals must pay self-employment tax and file Schedule SE (Form 1040) with the IRS.