Contracts in COVID - How to negotiate day rates in this new climate

14 August 2020 Brianna Paton

Kelly Sikkema U20dt Bwx Heu Unsplash

It’s been six months of COVID19 and among other impacts, the preference of freelance over permanent within advertising and marketing roles has left some candidates unsure of how to negotiate a day rate when looking at contract opportunities.

As companies deal with hiring freezes, unpredictable pipelines and the need for flexible, agile marketing teams, the preference towards freelance hires is understandable, but just how flexible should YOU be when looking at new roles during this (I have to say it) unprecedented time.

First time freelancers

Firstly, and very importantly, will you be invoicing through an ABN or will you be on the company payroll PAYG?

If you are invoicing through your ABN, do some research first. Confirm if your current ABN means you are eligible and if so, how much tax you will need to budget for plus any further information about this avenue. Click here. Also, ensure you also have all the necessary insurances in place.

If you are looking to move onto a day-rate on the company’s payroll via PAYG and have previously worked in full-time roles on an annual salary, there are a few things to consider.

In this climate, your negotiations will ultimately come down to the budget of the agency or client, so it’s best to be aware of what this is upfront to see if the figure is in-line with your financial needs. This will save disappointment down the track and also your valuable time with interviews if the amount ends up not being feasible.

Once you have established that the figure matches your life budget, it’s time to work out what your experience equates to as a day rate. Your helpful consultants at iknowho have put together a quick cheat sheet to help you see your market value based on your years of relevant experience. See here for a full overview on day rates.

As you can see from our cheat sheet, there are still some variations on the market rate at each level of seniority. Other things to consider are:

Length of contract; Typically, you can negotiate an additional 10% on the day rate for short contracts of 1-2 months, due to the high level of flexibility required on your end. 

Speciality of skills; If the skills you are required to bring for the role are of niche speciality or are in high demand you should have a little more wiggle room with negotiating day rates as in theory there is a supply demand issue and you should be in demand.

Superannuation; Always remember to ask if the day rate includes 9.5% superannuation or if this will be an added payment. This will impact what the net value of the rate is to you.

A final word in closing.

If you do accept a lower rate than you have earnt previously, don’t feel you are getting a raw deal or selling yourself short.

In this climate, see it as an opportunity to prove yourself within an initial contract. I recommend putting in writing that “based on your performance during the initial contract you would like any permanent salary or additional contract extensions to be re-negotiated”

This is a fantastic way to get yourself into a new role. Slide past those hiring freezes and give them a really good case to push through your permanent salary expectations to HR once you have already made yourself indispensable to the company.

Covid19 is changing the way we work and it’s changing the way we hire, be open-minded and see the opportunities presented and the flexibility available in this new 2020 workforce.

For more information or to speak to an iknowho consultant about the current market visit