Why Your Self-Employed Hourly Rate Must Be Higher Than the Average Employee3 June 2019
Self-Employed Status Comes with Perks and Financial Duties!
When it is time to put a value on your work and what to ask for in terms of compensation, we often rely on peers and colleagues for suggestions. As a locum, don’t make the mistake of comparing your hourly rate to a friend or classmate’s rate of pay, especially when they are employed. When setting your hourly rate, it’s important to understand the key differences between hourly compensation of a self-employed locum and a regular employee.
What are the Differences?
As a locum, you are your own boss, accountant, and financial advisor, and as such, you determine when, where and how much you work; and as a result of this you directly influence the amount of money that you earn. You also have the freedom to decide how much you need to earn based on your personal lifestyle and financial obligations.
As a locum, and since you earn your income by contracting with veterinary clinics, you have far more uncertainties and insecurities than someone who has a stable job. These assignments tend to be short-term, not guaranteed, and in some cases, can be terminated before the end of the contract. As you know, working as a self-employed contractor doesn’t come with a guaranteed paycheck and secure benefits each week, meaning that you have to carefully plan your income flow.
If you are self-employed as a locum in Canada, you are also not entitled to the same benefits provided to regular full-time employees, should you lose your job (and it is not your fault). In Canada, self-employed individuals area able to access Employment Insurancethrough the government for special circumstances such as maternity leave and compassionate care (caregiver).
Expenses and Fees
When you work as a locum you do not have a benefits package or “perks” like those individuals that are employed by a company or corporation. As a result, you are responsible for paying for your own:
- Insurance (life, disability, etc.)
- Continuing education
- Vacation and sick time
- Retirement and Pension*
- Professional fees
*When you are employed in Canada, you and your employer pay a determined amount of money (based on your income) into the Canadian Pension Plan. However, if you are self-employed, you must pay both yours and the amount the employers would pay into this fund each year; so essentially, your contribution is double that of individuals that work as an employee.
Not only do you have the required expenses that most people think of as obligations associated with self-employment, but you have all of the little things that can add up quickly. These can be things as simple as:
- Travel expenses
- Licensing fees and Veterinary Professional Liability Insurance
- Office equipment (computer, copier, fax, etc.)
- Office supplies (paper, pens, printer ink, etc.)
- Rent and utilities
- Legal or accounting fees
- House and pet sitting while you are away
- Marketing (websites, business cards, etc.)
Determining Your Hourly Rate
At Oxilia, the question of determining the hourly rate is one of the most frequently asked questions by animal health professionals. Here are some statistics generated by our system by region and type of professionals, as of January 31, 2019. We divided the information by the highest, the lowest, and the group average. The province of Quebec has the largest difference between the highest and lowest hourly rates, probably because Oxilia has the largest community of users.
|Veterinarian Locums||RVT Locums|
|Hourly Rate ($) CAD by Canadian province||Low||Average||High||Low||Average||High|
Obviously, there are other variables that will have an impact on the hourly rate : years of experience, if an internship have been completed, the individual type of personality, capable of doing dental and orthopedic surgical cases, etc. You will find our tips in this popular article on “Tips to become the perfect locum and increase your value!”
“Government of Canada- EI Special Benefits for Self-Employed People – Overview.” 18 Jan 2019, https://www.canada.ca/en/services/benefits/ei/ei-self-employed-workers.html
“Quick Books- Canada Pension Plan Contributions for Self-Employed Entrepreneurs.” https://quickbooks.intuit.com/ca/resources/future-planning/cpp-contributions-self-employed-entrepreneurs/