When you work as a freelancer, you determine the rate. For example, you can agree on an all-in rate with your client, work on a commission basis or per hour. We believe that an average minimum rate per hour is essential for working on a self-employed basis. We believe that you should have the space to protect yourself well against working at your own expense and risk, but this also protects your client against bogus self-employment.
The minimum hourly rate has been created to prevent bogus self-employment. Although European legislation makes this difficult, we find it so important that we do not reward freelancers who work below the average hourly rate of € 16 per hour. We think it is important that you not only work for your own account but that you are also in charge! You need space for control. The minimum rate is of course not a guideline, we think you should charge rates in line with the going market rates.
The DBA Act offers a lot of ambiguity. Part of the Act is the minimum rate. Despite the fact that the minimum hourly rate is difficult to set because it is possible to work on the basis of all-in rates or on commission, it is important that the average hourly rate is above 16 euro excl. VAT per hour. This will prevent exploitation and bogus self-employment. If the rate is less than 16 euro, then it is usually an employment contract.
If the rate is less than 16 euro, we cannot guarantee fair conditions. Should there ever be a conflict with your client, by your client or an authority such as an insurance company, the tax authorities or the UWV, we will explicitly distance ourselves from this. In that case, you or your client cannot rely on any of the assurances we offer. If we find out, we can suspend and/or terminate the agreement without prior notice, without being liable to you or your client in any way and, where necessary, report this to the competent authorities.
Unfortunately we also have to mention this here, but we occasionally get the comment from clients that in an employment relationship the minimum wage is lower for people between 18 and 21 and why this is not also the case for freelance. When you work freelance, you work at your own expense and risk and you take control of your income. A minimum rate is required for this. Apart from the fact that we find 16 euro on the low side, we find it even less exploitative and unfair. Someone hires you because of your capacities and not because of your age! The European Commission for Social Rights in the Netherlands recently ruled on this. Unfortunately, we do not yet see this reflected in the pay for people in a working relationship, because that is where we find it unfair.
When a rate of less than 16 euro is applied, it is usually an employment relationship. As the client, the invoice will not have any liberating effect and the tax authorities can assess the payment as net salary, on which wage tax and social security contributions will still have to be paid. The tax authorities can also impose a fine of up to 10 percent with a maximum of 5,000 euros for the fact that no and/or late returns have been made. Finally, the contractor can be regarded as an employee who falls within the scope and collective labour agreement under which the employer works.