From Employee to Freelancer: Calculate your daily rate taking into account French social security contributions

You've taken the plunge, chosen your status, and are about to meet your first clients, but suddenly you realize you don't know what price to charge for your first few days? Don't panic, we'll explain!

Understanding the TJM

The daily rate (TJM) is the rate you charge for a day's work. It is essential to ensure the profitability of your freelance assignments, especially in the recruitment sector.

Step 1: Analysis of your current situation

Assessing your current salary : Start by analyzing your gross annual salary as an employee, including benefits such as bonuses, meal vouchers, health insurance, etc. This gives you a basis for calculating your income as a freelancer.

The daily rate you will receive must also take into account your social security and tax contributions, rent, supplementary health insurance/pension plan, other insurances, etc. You must therefore absolutely consider these expenses when calculating your average daily rate. Don't forget: depending on the legal status you choose, the contribution rate will vary.

Also consider your additional professional expenses: tools, software, licenses, subscriptions, communication, and marketing, which can significantly increase the bill, as well as your management costs (accounting, administration, etc.). These elements are difficult to quantify upfront and therefore to integrate into your daily rate, but they will take time and must therefore be factored into your calculations.

Step 2: Converting salary to daily rate

Calculating the daily rate : Converting your salary to the daily rate involves several steps:

1. Determining gross annual salary : Take your current annual salary, including benefits.
2. Adding freelance expenses : In France, freelancers must pay social security contributions to URSSAF, which vary depending on their status (self-employed, liberal profession, etc.). Estimate these expenses, which include social security contributions, contributions to vocational training, and possibly the CFE (Business Property Tax).
3. Estimating the number of days worked : Calculate the number of days you plan to work in the year (generally, 220 days are counted, excluding weekends and public holidays).
4. Calculating the TJM : Divide your estimated gross annual income (salary + expenses) by the number of days worked to obtain your TJM.

Example

Let's take the example of an IT recruiter with a gross annual salary of €50,000. Deductions are estimated at around 30% of gross income, or €15,000.

1. Gross annual salary + benefits = €50,000 + €15,000 = €65,000
2. Number of days worked per year = 220
3. TJM = €65,000 / 220 ≈ €295

Your daily rate would therefore be approximately €295.

⚠️ In our example, we take a basis of 220 working days, which corresponds to a working basis of 5 days/week.

Additional considerations

• AMT (Average Hourly Rate) : For short assignments, calculate an AMT by dividing your daily rate by the number of hours worked in a day.
• Pricing Strategy : Adapt your daily rate based on your experience, demand, and the specific characteristics of the freelance recruitment sector. Don't hesitate to research market practices to have a benchmark against which to compare your calculations!
• Insurance : Don't forget to include professional insurance costs in your expenses.

Conclusion

Transitioning from employee to freelancer is a significant step. By correctly calculating your daily rate, taking into account the specific social security contributions of the French system, you lay the foundation for a successful freelance career in the recruitment sector. You might forget to factor in certain expenses in the first few months, which could cause some stress. However, don't panic; your daily rate can be easily adjusted whenever you want (unlike a legal status, for example!). So remember to adjust it regularly based on the growth of your business and the market.

We hope you found this article helpful. Share your experiences or ask your questions in the comments!