Money for Freelancers: Checkpoint 1

Quick checkpoint - five questions on freelancing, irregular income, pricing, contracts and taxes.

Question 1 of 5 What is the central financial challenge of freelancing?

Too much paid leave Irregular income Employer-deducted taxes Automatic retirement contributions

Freelancers must smooth uneven income and manage their own taxes and benefits.

Question 2 of 5 How does a holding account help a freelancer?

It avoids all taxes Income goes in and a fixed monthly salary is paid out, smoothing lumpy earnings It invests in stocks automatically It replaces insurance

Leaving surplus income in the account covers lean months.

Question 3 of 5 Why must freelance hourly rates be higher than salaried hourly pay?

Freelancers work more hours They must cover taxes, benefits, costs and non-billable time Clients prefer high prices Freelancers pay no taxes

Freelancers typically bill only 1,000 to 1,400 hours a year.

Question 4 of 5 What is a good way to reduce the risk of non-payment?

Never write anything down Ask for an advance and use milestone payments Deliver all work before discussing price Accept every client

Advances and milestones commit clients and limit your exposure.

Question 5 of 5 Under presumptive taxation for professionals, what share of receipts is declared as profit?

10 percent 25 percent 50 percent 100 percent

Specified professionals can declare 50 percent of gross receipts as profit within the limit.

← Back to GST for Freelancers Next lesson → Getting Paid From Abroad

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