Am I being a mug?

[ForBrickSnake]

I clean for a company (I get holiday and sick leave paid for). I work really hard for customers and get paid 11.50ph. The customer is charged £30. Is this reasonable?

Any way you can go private? Always a big need for thorough / reliable cleaners.

Starts at £18 p/h around here (east of England)

Probably, there are many additional things that your employer has to cover from that £30 an hour before they can pay you.

If you worked independently how much would you need to charge per hour to cover the costs of running your own business?

Yes. That’s how business works. Costs have to be covered, and then profit needs to be added at each layer. If you don’t like it then start your own business. You don’t currently have any of that stress because they do it all. You can do it yourself if you want more per hour, but remember that you’ll be paid for the hours cleaning, you won’t be paid for the hours doing the work behind the scenes so you have to charge enough to cover that work and make it worth it. You’ll need to sort your own insurance and everything as well, and take on all the risk.

Yes. Your employer will be paying (most likely) NI and pension contributions, they cover you for annual leave and sick pay and they will be insured, public liability at a minimum. The customer pays for the reliability and security offered by the company they hire.

That does seem rather a big gap, but you'd need to work out the benefit of your holiday pay and employer's pension contributions plus account for the need to find your own clients, potential sick pay and the cost of public liability insurance to work out how much you'd need to charge before you're better off working for yourself.

Do you currently get paid for your travel, both time and the cost of driving/public transport? What currently happens if a customer stops using the service? If you worked for yourself, you'd have to find another client or else lose money, but presumably now you get moved onto other work?

They will have other overheads too, such as paying other staff to cover when regular employees are off sick, their insurance bills will be astronomical, they have payroll and accountancy fees, tax to pay on their profits, and depending on how large the business is, the fee they charge the customers may include VAT. They are also dealing with the hassle of getting the customer to pay for the service, and some customers can be a real pain in the neck. They would also find you other work if the current place you work at cancels their contract, so all in all, I don't think what they are charging is unreasonable. If it was, then their customers wouldn't pay that much, would they?

Go self employed

No it isn't reasonable at all. It isn't as hard as you think to set up on your own. There is help out there to do just that.

@ForBrickSnake this sounds entirely reasonable. As others have said above, this relates to the company overheads. What you may not know is that paying an employee £22308 per year (minimum wage, of which you are just over by a few pence per hour), actually costs the company somewhere between £39000 and £44500 depending on how they are structured. This explains why they are charging you out at what might appear to be an exhorbitant rate. It is actually just what it costs them to be viable, and even then it looks like only just.

As an aside, this is set to become exacerbated in the budget as the amount it costs a business to have an employee will increase, even though it won't impact the individuals. It just makes running a small company an order of magnitude more difficult. Hopefully, the reality of the budget will be a little different to that speculated by the press.

It’s not hard at all to set up. It’s incredibly hard to be a success, to out earn what you get as a full time employee and to last rather than be a flash in the pan.

At my old office we had a wonderful cleaner someone had found privately. On the back of the work she did for us, she ended up cleaning for several staff members and got a lot of word of mouth. She is still working for them years later and has built up a decent business. Unfortunately, as she got more successful she stopped cleaning for our company as it was a little further than she wanted to commute and we ended up with a company.

However, she was, and I'm sure still is, an exceptional cleaner who really went the extra mile. So I don't disagree at all with you. An added advantage was she was so great, it improved the habits of the slacker staff as no-one wanted to leave a mess for Susan!

I completely get that the company have overheads and that needs to be taken into account when setting up. There is also the issue of having clients back to back, no time to eat and going to the loo has to be strategically planned. I am shattered at the weekends so I suppose it's to get a better balance- maybe I'm being neive that I could do this self employed? Thank you for all the input so far.

I’m a small business owner. I did all the start up from nothing and slogged to build it into a success. I’m not saying it can’t be done, I’m just saying it’s not as simple as “they charge the client £30 an hour so I’ll set up on my own and charge £30 an hour myself then I’ll be quids in.”

It’s very very hard. And you do lose the security of employment.

@ForBrickSnake
You could go it alone. Loads of cleaners do. But really consider if you have the ability to run the business, the drive to do it, the knowledge to get the clients and do all the admin. And if you can absorb the risk for the first couple years of setting up because there is no sick pay, no holiday pay, no cover. No pension contributions from your employer, no guaranteed work. All expenses come out your pocket.

I've done the sums. Something I've been thinking about for a while. I'm well aware I don't charge the same as they are. Also will not be poaching clients. I've considered expenditure- tax ni (my current does not pay any pension) supplies, insurance, allowing for leave/sick etc etc. Just need clients now!😬😀