The result will shock you

So I put this really nice summer picture here to cool you down a bit before the shock comes:

Your hourly rate as a freelancer needs to be about 1.5 to 2.5 times of what it would be as an employee - based on breaking down the annual gross salary down to hours.

That is also roughly what a consulting company would charge for you.

A quick example with 100K salary as a basis

Let's assume for a moment that your current salary is 100K before taxes and social security contributions. So about 8'300 CHF per month.

To make it sustainable in the long-run, a consulting company would have to charge about

100'000 x 2.5 / 1600 = 156 CHF per hour.

"Why so much?"

Have you ever wondered why consulting companies or "body leasing" firms charge so much?

Because it's not sustainable otherwise.

On the hand, there are some additional social security contributions on the employer's side.

If you make about 100K in "gross" salary, there is roughly an additional 13% of employer's side social security contributions in Switzerland.

So actually your real cost for your employer is not 100K, but about 113K.

The government collects social security (AHV/IV/EO/ALV) "twice".

And that is not yet including any expenses for a computer, a desk, office space etc.

As a freelancer, you have to pay all of that on your own, so you need to factor it in.

And then you might become sick, or pregnant, or a father

But there is more: Chances are that you are still quite young when you think about becoming a freelancer.

But even in your twenties, you might be sick for a couple of weeks or in extreme cases months.

Or the happier alternative is that you become a mother or a father.

In all these cases, your ability to work will be impaired for a while. For some people this is less important, for others this is more of a factor. And to a good degree, it is not under your own control. So you need to plan and save ahead.