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Self-employed and Confused About Your Compensation?

November 30, 2017 by OSYB Staff

After much thought, you have transitioned from being an employee to becoming self-employed.  As an employee, you always knew when your next paycheck was coming and you could plan accordingly.  As a freelancer, you are in charge of your own compensation.

Intuit QuickBooks shares an 8-step guide to paying yourself, of course, keep in mind that every job will have it’s own unique situations and steps may be varied.  The key is investing the time to plan, structure and track your payment plan.

  1. Estimate your revenue
  2. Calculate your business expenses
  3. Figure out what you need to get paid
  4. Create a reinvestment strategy
  5. Separate business and personal accounts
  6. Set-up a payment method
  7. Determine the payment interval
  8. Track your revenue and expenses carefully

At this point. making the move from employee to freelancer may seem daunting as you deal with aspects of employment that your employer previously took care of for you.  The upside is that most of the time consuming hard work happens up-front and tools like QuickBooks can simplify the long-term process.

A major motivator to creating your payment methodology is knowing that at the end of the year, your taxes will be due, and having your payments and expenses planned and tracked will make tax season more palatable.

For more details:  How to Pay Yourself When You’re Self-Employed