English-German Translations, UK

Overhead and tax effects on rates

Translation agencies compared with freelance translators

When calculating translation prices, translation agencies, as well as freelance translators, have to consider their general overheads. Because overhead and tax effects on rates are a major influence on prices, please find below a detailed table comparing these costs.

Overheads, translation agencies:Overheads, freelance translators:
In-house staff such as sales, admin, accountancy, IT support, translators, proof-readers/revisers) and directors’ wages and associated costsOccasional professional services needed
Cost of hiring freelance translators
Office running costs such as rent of premises, business rates, telephone, Internet, insurance, accounting, advertisingTelephone, Internet, insurance, advertising etc
Software and hardware for the entire office staffSoftware and hardware for one person
Retirement provision for staff and directorsRetirement provision
Taxes, translation agencies:Taxes, freelance translators:
VAT always chargeableVAT not always chargeable
Corporation taxIncome tax
National insurance for staff and directorsNational insurance at self-employed level
Other local taxes may applyOther local taxes may apply

Analysing the above table, it is easy to understand why translation agencies’ rates don’t just tend to be higher than those of agency-independent translators but they have to be higher to cover the considerable overhead and tax effect on translation companies’ prices.

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