A few practical remarks, that I believe should be resolved if this were to be implemented generally. How do you deal with people who are not cheerful to have spent the time thinking about their cheerful price, and having the deal not occurred. As you wrote, they may have imagined that the price will be pay and enjoy this thought, they probably need to do this to ensure that the price is cheerful, and so it may hurts a little bit. Worse, if you speaks to a room, then you are essentially asking a bunch of people to do a quote, that’s actual work, because they need to be listen to you, consider the question, and know that whatever price they quote, there is plenty of chance not to be selected because someone gave a lower price.
I’d add that, if you want to obey the law, tax laws in particular, then anything you do for a price is going to be freelancing at least, to need to be declared to the tax authority, requires paperwork, potential tax service check, social security, retirement contribution… depending on the country. So, while I agree it could make sens to behave this way with friends who are also freelancers, it seems extremely hard to generalize todays, unless you accept to put those friends at middle-term risk. Maybe you know all of your friends can deal with any of those complication if required, if a tax authority asks why there are more money on their bank account, but if anyone fear hurting someone by accepting a price to low, then I would assume the same person would fear those consequences too.
I know for a fact I sometime rejected job I would have been able to do and was offered a correct price just because I need to do tax declaration in three or four countries and the few hundreds euros I could have made were not worth the added complexity.
I’d add that, if you want to obey the law, tax laws in particular, then anything you do for a price is going to be freelancing at least, to need to be declared to the tax authority, requires paperwork, potential tax service check, social security, retirement contribution… depending on the country.
Oof – I’m not sure this is even generally true, but that’s a really depressing point!
I think there are in fact, in the U.S. anyways, exceptions to literally being required to file a 1099 for every thing that you pay money for someone to do for you. I don’t think, e.g. paying an allowance to your children based on their performance of chores, requires it. And there’s usually exceptions for tax reporting/filing for small sums too.
I know for a fact I sometime rejected job I would have been able to do and was offered a correct price just because I need to do tax declaration in three or four countries and the few hundreds euros I could have made were not worth the added complexity.
That seems like a contradiction in terms. It doesn’t seem right to consider something a ‘correct price’ if it didn’t in fact cover real costs you would have incurred to provide the service or sell someone a product. Have you considered explicitly including those costs in your prices?
I’ll try to be more specific.
In itself, I would have happily billed them 50€ and think I made a profit. The job I rejected required to make a change to a code base that I know extremely well, and that would have been done in less than 30 minutes, including testing.
If I were to accept free lance client in 2021, I would need to declare this income. I have literally no idea how much work it would be to declare it in the four countries I have to do a tax income declaration. However, it would essentially be a one time cost whatever the number of job I got in the year.
According to French law, an error in declaration could cost 5000€ if I recall correctly, and I really don’t believe I would not make an error if I did the tax myself. So I would need to hire an accountant. I didn’t thought about billing 5000€ or an accountant to the client. I’ll clearly also need an accountant in Germany, given that I don’t speak German. I’ve yet no idea whether the accountant would charge more if, with my salary, I also got some free lance job.
I would find strange anyway to charge all of those one-time-cost to the first client; however I would not expect to have more than 5 clients either, so the cost would still be pretty high. And at this point, the bill would mostly contain the accountant costs and not the cost of my work anymore.
So yeah, I could clearly ask for 10 000€ instead of the 50€ I first thought about. It would clearly have been an happy price, covered both the fees if I made a mistake and the accountant fees. And just I’d be happy to know I can help people that much that it’s worth this price for them. But I don’t believe asking this kind of price would have make sens here.
I’m sorry – I’m pretty familiar with all of that, and I was (implicitly) including all of the costs you mentioned, and your time and ‘cognitive ops’ too, when I asked:
Have you considered explicitly including those costs in your prices?
I admit it might be more pragmatic to just decline the work than explain that your price needs to cover having an accountant for each client’s country prepare your taxes.
But anyone willing to pay you money for something should be receptive to you refusing because of the costs of you doing business with them. So I think offering your cheerful price of 10.000€ (or €10,000), and a brief explanation of the accountant costs, would be pretty sensible actually.
A few practical remarks, that I believe should be resolved if this were to be implemented generally. How do you deal with people who are not cheerful to have spent the time thinking about their cheerful price, and having the deal not occurred. As you wrote, they may have imagined that the price will be pay and enjoy this thought, they probably need to do this to ensure that the price is cheerful, and so it may hurts a little bit. Worse, if you speaks to a room, then you are essentially asking a bunch of people to do a quote, that’s actual work, because they need to be listen to you, consider the question, and know that whatever price they quote, there is plenty of chance not to be selected because someone gave a lower price.
I’d add that, if you want to obey the law, tax laws in particular, then anything you do for a price is going to be freelancing at least, to need to be declared to the tax authority, requires paperwork, potential tax service check, social security, retirement contribution… depending on the country. So, while I agree it could make sens to behave this way with friends who are also freelancers, it seems extremely hard to generalize todays, unless you accept to put those friends at middle-term risk. Maybe you know all of your friends can deal with any of those complication if required, if a tax authority asks why there are more money on their bank account, but if anyone fear hurting someone by accepting a price to low, then I would assume the same person would fear those consequences too.
I know for a fact I sometime rejected job I would have been able to do and was offered a correct price just because I need to do tax declaration in three or four countries and the few hundreds euros I could have made were not worth the added complexity.
Oof – I’m not sure this is even generally true, but that’s a really depressing point!
I think there are in fact, in the U.S. anyways, exceptions to literally being required to file a 1099 for every thing that you pay money for someone to do for you. I don’t think, e.g. paying an allowance to your children based on their performance of chores, requires it. And there’s usually exceptions for tax reporting/filing for small sums too.
That seems like a contradiction in terms. It doesn’t seem right to consider something a ‘correct price’ if it didn’t in fact cover real costs you would have incurred to provide the service or sell someone a product. Have you considered explicitly including those costs in your prices?
I’ll try to be more specific. In itself, I would have happily billed them 50€ and think I made a profit. The job I rejected required to make a change to a code base that I know extremely well, and that would have been done in less than 30 minutes, including testing.
If I were to accept free lance client in 2021, I would need to declare this income. I have literally no idea how much work it would be to declare it in the four countries I have to do a tax income declaration. However, it would essentially be a one time cost whatever the number of job I got in the year.
According to French law, an error in declaration could cost 5000€ if I recall correctly, and I really don’t believe I would not make an error if I did the tax myself. So I would need to hire an accountant. I didn’t thought about billing 5000€ or an accountant to the client. I’ll clearly also need an accountant in Germany, given that I don’t speak German. I’ve yet no idea whether the accountant would charge more if, with my salary, I also got some free lance job.
I would find strange anyway to charge all of those one-time-cost to the first client; however I would not expect to have more than 5 clients either, so the cost would still be pretty high. And at this point, the bill would mostly contain the accountant costs and not the cost of my work anymore.
So yeah, I could clearly ask for 10 000€ instead of the 50€ I first thought about. It would clearly have been an happy price, covered both the fees if I made a mistake and the accountant fees. And just I’d be happy to know I can help people that much that it’s worth this price for them. But I don’t believe asking this kind of price would have make sens here.
I’m sorry – I’m pretty familiar with all of that, and I was (implicitly) including all of the costs you mentioned, and your time and ‘cognitive ops’ too, when I asked:
I admit it might be more pragmatic to just decline the work than explain that your price needs to cover having an accountant for each client’s country prepare your taxes.
But anyone willing to pay you money for something should be receptive to you refusing because of the costs of you doing business with them. So I think offering your cheerful price of 10.000€ (or €10,000), and a brief explanation of the accountant costs, would be pretty sensible actually.