The Cost Breakdown: Employee vs. Freelancer
The Base Salary
· The National Minimum Wage for those aged 21+ in 2025/26 is £12.21 per hour.
· A freelance bookkeeper typically charges between £20-£40 per hour (Bark.com).
· According to the Institute of Certified Bookkeepers (ICB), the average rate for bookkeepers is £25-£35 per hour, though rates can range from £15-£65 per hour, depending on experience and service level.
At first glance, employing a bookkeeper seems more cost-effective. But an employee’s wage is just the tip of the iceberg.
The Hidden Employment Costs
Employing an in-house bookkeeper involves numerous additional expenses beyond their hourly wage, including:
· Employer National Insurance Contributions (NICs) – 13.8% on earnings above £12,570 per year.
· Workplace Pension Contributions – A minimum of 3% of qualifying earnings.
· Holiday Pay – 5.6 weeks per year, which must be budgeted for.
· Sick Pay – £116.75 per week (statutory rate) after the fourth consecutive day of illness.
· Holiday Cover – If your employee takes leave, you either absorb the extra workload or hire temporary cover.
· Death in Service Benefits – A common employee benefit adding further cost.
· Training & Software Costs – Essential for keeping skills and compliance up to date.
· Office Space & Equipment – A desk, computer, software, and office supplies.
· Recruitment & HR Costs – Advertising, hiring, onboarding, and managing an employee all require time and resources.
Once you factor in these costs, your £12.21 per hour employee could actually be costing your business closer to £18-£22 per hour or more.
Freelance Costs: A Transparent Alternative
A freelance bookkeeper may charge more per hour on paper, but this rate is all-inclusive. You only pay for the work done—no sick pay, no pension contributions, no holiday cover, and no additional overheads.
Most importantly, freelancers are often highly experienced, qualified professionals who operate at a higher level than an entry-level, minimum-wage employee. A bookkeeper isn’t just an administrative assistant—they manage vital financial records, ensure compliance, and help you make sound business decisions. For such a trusted role, expertise matters—and expertise comes at a premium.
As the ICB advises, even if you are an inexperienced bookkeeper just starting out, you should ensure that your rate covers all expenses, including software, insurance, training, and administrative costs, plus a fair wage for your time. More experienced bookkeepers, especially those offering high-value services, can and should charge accordingly.
Comparing the Two
Questions to Ask When Hiring a Freelance Bookkeeper
Finding the right bookkeeper is crucial for maintaining accurate financial records and ensuring compliance. Here are some key questions to ask when searching for a freelance bookkeeper:
- What qualifications and certifications do you have? – Look for recognised accreditations such as ICB or AAT.
- How much experience do you have working with businesses like mine? – Industry-specific experience can be valuable.
- What services do you provide? – Ensure they cover everything you need, from VAT returns to payroll.
- What accounting software do you use? – Compatibility with your existing systems is essential.
- How do you charge – hourly, fixed fee, or package rates? – Transparency in pricing is key.
- Can you provide client testimonials or references? – A good bookkeeper should have a track record of satisfied clients.
- How do you handle confidentiality and data security? – Your financial data must be protected.
- What happens if you are unavailable (e.g., illness or holiday)? – Ensure there is a contingency plan.
- Do you offer advisory services, or just transactional bookkeeping? – Some bookkeepers provide valuable financial insights.
- What is your turnaround time for tasks? – Timely financial reporting is essential for decision-making.
The Verdict: Which is Right for Your Business?
If your business requires full-time, ongoing bookkeeping support, hiring an in-house bookkeeper might seem viable. But for most small and medium businesses, a freelance bookkeeper offers greater expertise, flexibility, and financial efficiency.
A freelancer provides on-demand, expert-level bookkeeping without the long-term commitment and hidden costs of employment. With a freelancer, you pay for results, not presence.
Need a Reliable, Qualified Bookkeeper? Let’s Talk.
If you want expert bookkeeping support without the employment burden, I can help. With extensive experience in financial management, I provide accurate, reliable bookkeeping tailored to your business needs.
Get in touch today and let’s discuss how I can help streamline your finances efficiently and affordably.
Related Posts

Retail | Retail Management | Retail Consultancy
People, Place, Purpose: Why Businesses Built on Values Stand the Test of Time
Following my recent presentation to the Co-op – In Conversation: People, Place, Purpose – I’ve been reflecting even more deeply on what makes a business truly sustainable in the long term. In to...

Retail Management | Retail Experts | Retail Consultancy
Boosting Sales & Footfall: Proven Retail Consultancy Tips for UK Businesses
The UK retail market is more competitive than ever. With evolving consumer behaviours, digital advancements, and economic challenges, retailers must adapt to drive both footfall and sales. Whether you...

Marketing: The Most Undervalued Business Function – And Why That Needs to Change
In many businesses, marketing and sales are often seen as secondary to finance, operations, and legal. While finance ensures profitability, operations maintain efficiency, and legal keeps the company ...