Employee to freelancer: calculate your TJM taking into account French charges
You've launched your business, you've chosen your status, you're getting ready to meet your first customers and you suddenly realize that you don't know how much to charge for your first days? Don't panic, we'll explain!
Understanding TJM
The 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: Analyze your current situation
Evaluate your current salary: Start by analyzing your gross annual salary as an employee, including benefits such as bonuses, luncheon vouchers, health insurance, etc. This gives you a basis for calculating your income as a freelancer. This will give you a basis for calculating your income as a freelancer.
The AADR you receive will also have to take into account your social security and tax charges, your rent, your provident/mutual insurance scheme, your insurance, and so on. You must therefore take these charges into account when calculating your Average Daily Rate. Don't forget: depending on the legal status you choose, the rate of contributions will be different.
Don't forget your additional professional expenses: tools, software, licenses, subscriptions, communication, marketing, etc., which can all add up to a hefty bill, as well as your management costs (accounting, administration, etc.). These elements are difficult to quantify in advance, and therefore difficult to integrate into your TJM, but they will take up your time, and must therefore be taken into account in your calculation.
Step 2: Converting wages into TJM
Calculating TJM: Converting your salary into TJM involves several steps:
- Determining gross annual salary: Take your current annual salary, including benefits.
- Adding freelance charges: In France, freelancers have to pay social charges to URSSAF, which vary according to their status (auto-entrepreneur, liberal profession, etc.). Estimate these charges, which include social security contributions, professional training contributions, and possibly CFE (Cotisation Foncière des Entreprises).
- Estimated number of days worked: Calculate the number of days you plan to work in the year (usually 220 days, excluding weekends and public holidays).
- Calculating your GRR: Divide your estimated gross annual income (salary + charges) by the number of days worked to obtain your GRR.
Example
Let's take the example of an IT recruiter with a gross annual salary of €50,000. Expenses are estimated at around 30% of gross income, or €15,000.
- Gross annual salary + charges = €50,000 + €15,000 = €65,000
- Number of days worked per year = 220
- TJM = €65,000 / €220 ≈ 295
Your MRT would therefore be around €295.
⚠️ In our example, we take a base of 220 days worked, which corresponds to a working week of 5 days.
Additional considerations
- AHR (Average Hourly Rate): For short assignments, calculate an AHR by dividing your AHR by the number of hours worked in a day.
- Pricing strategy: Adapt your TJM according to your experience, demand and the specifics of the freelance recruitment sector. Don't hesitate to look at what's being done on the market to have a benchmark against which to compare your calculations!
- Insurance: Don't forget to include professional insurance costs in your expenses.
Conclusion
The transition from salaried employee to freelancer is an important step. By correctly calculating your TJM, taking into account the charges specific to the French system, you lay the foundations for a successful career as a freelancer in the recruitment industry. It's possible that you'll forget to take certain charges into account for the first few months, and that this will stress you out a little. However, don't panic: your TJM can evolve when you want it to (unlike a legal status, for example!). So remember to adjust it regularly as your business and the market evolve.
We hope you found this article useful. Share your experiences or ask your questions in the comments section!