Overhead and tax effects on rates
Overhead and tax effects on rates of translation agencies compared with freelance translators
When calculating translation prices, translation agencies, as well as freelance translators, have to consider their general overheads. Because these expert a major influence on prices, I have compiled a detailed table comparing these costs.
| Overheads, translation agencies: | Overheads, freelance translators: |
| In-house staff such as sales, admin, accountancy, IT support, translators, proof-readers/revisers) and directors’ wages and associated costs | Occasional professional services needed |
| Cost of hiring freelance translators | Â |
| Office running costs such as rent of premises, business rates, telephone, Internet, insurance, accounting, advertising | Telephone, Internet, insurance, advertising etc |
| Software and hardware for the entire office staff | Software and hardware for one person |
| Retirement provision for staff and directors | Retirement provision |
| Taxes, translation agencies: | Taxes, freelance translators: |
| VAT always chargeable | VAT not always chargeable |
| Corporation tax | Income tax |
| National insurance for staff and directors | National insurance at self-employed level |
| Other local taxes may apply | Other local taxes may apply |
Analysing the above table, it is easy to understand why translation agencies’ rates don’t just tend to be higher than those of agency-independent translators but they have to be higher to cover agencies’ considerable overheads.