{"id":25645,"date":"2021-02-07T22:53:48","date_gmt":"2021-02-07T22:53:48","guid":{"rendered":"https:\/\/www.diaryofanadi.co.uk\/?p=25645"},"modified":"2023-05-24T11:32:50","modified_gmt":"2023-05-24T10:32:50","slug":"adi-earnings-and-wages","status":"publish","type":"post","link":"https:\/\/diaryofanadi.co.uk\/?p=25645","title":{"rendered":"ADI Earnings and Wages"},"content":{"rendered":"\n

\"\u00a320People keep asking this. I\u2019ve had two emails this week: how much do you earn as an instructor?<\/strong> When it is asked online, almost every time some dipstick somewhere tries to answer it by doing it all wrong, or by making it too complicated.<\/p>\n\n\n\n

If you were in a salaried position where the stated wage was \u00a330,000 per year, that would be before tax and National Insurance.<\/strong> Any comparison for being self-employed also has to be before tax and NI. <\/strong>That\u2019s because tax and NI are different for everyone (single, married, disabled, and God knows what other things). You need to keep these out of it in order to compare with self-employed income.<\/p>\n\n\n\n

In a salaried position, you get the stated wage no matter what you do. If it says you get \u00a330,000 a year, then you get \u00a330,000 a year – before tax and NI.<\/strong> If you change to another salaried job, if the stated wage of the new job is \u00a332,000, then you will<\/strong> be earning \u00a32,000 more – before tax and NI.<\/strong><\/p>\n\n\n\n

To compare a self-employed job, you need to get an equivalent figure before tax and NI. <\/strong><\/p>\n\n\n\n

Being self-employed is different to being salaried, because you are not guaranteed an income. It depends on how much work you do, and in the case of a driving instructor, that work could be anything from 0 hours up to 50+ hours in any given week. It would be utterly stupid to budget based on doing 50 hours every week, and what you need is the average<\/strong> for an entire year. Since you are trying to predict a career change, you need to assume a sensible average figure and not just a big number you like the sound of – and which you would not be able to achieve reliably, if at all.<\/p>\n\n\n\n

If being an ADI is going to be your main source of income, you need to be thinking of around 30 hours as a safe and sensible average<\/strong> figure once you are established. In reality, work will fluctuate, and if you end up averaging 35 or 40 hours, that\u2019s great. But don\u2019t get carried away, because something might happen which brings the average down to 25 hours or even less, and it is much harder to sustain a higher average than it is a lower one. If you underestimate, anything more is a bonus. But if you overestimate, not achieving it could be disastrous if you\u2019ve bet your house (or mortgage repayments) on it.<\/p>\n\n\n\n

Then there is your hourly lesson rate. Not everyone can charge \u00a340 an hour. Some ADIs live in areas where \u00a325 might be at the top end of what people will pay. Find out what your area\u2019s average is and use that. In Nottingham, for example, \u00a330 an hour is a sensible and realistic hourly rate right now (elsewhere on the blog I have referred to figures of \u00a325 and \u00a327 from when those were typical rates).<\/p>\n\n\n\n

Finally, how many weeks will you work? Let\u2019s assume – sensible assumptions are important when you\u2019re self-employed – that you work 48 weeks of the year.<\/p>\n\n\n\n

The maths is now quite simple. 30 hours a week times by \u00a330 an hour times by 48 weeks means you will be taking \u00a343,200 from your pupils each year. That\u2019s your turnover<\/strong> (total income).<\/p>\n\n\n\n

But you also have business costs, or expenses.<\/strong> You have to pay for your car, fuel, insurance, and so on, and you use your turnover<\/strong> to pay for these. No matter what you see the feral monkeys on social media claiming, they do not<\/strong> run a car \u2018for nothing\u2019. One way or another there is a weekly business cost associated with even the most dilapidated and ancient jalopy you could find. The vast, vast majority of instructors will have weekly vehicle costs of at least \u00a3100 (for the whole 52 weeks of the year). Fuel is also around \u00a3100 for a 30 hour week (for the 48 weeks you work).<\/p>\n\n\n\n

Combining these, your car costs will amount to \u00a3100 times by 52 weeks, totalling \u00a35,200. Fuel usage is \u00a3100 times by 48 weeks, which totals \u00a34,800. Together, that\u2019s \u00a310,000 of expenses.<\/strong><\/p>\n\n\n\n

Therefore, your actual income – your wage before tax and NI<\/strong> – based on an average of 30 hours per week at \u00a330 per hour is \u00a343,200 minus \u00a310,000, which equals \u00a333,200.<\/p>\n\n\n\n

Before you drool all over your keyboard, it\u2019s worth considering a few realistic and quite possible variations in this calculation. Firstly, what if you only average 25 hours a week instead of 30? In that case, your annual wage would drop to around \u00a326,500.<\/p>\n\n\n\n

Secondly, what if you do 30 hours, but can only charge \u00a327? In this case, your wage would be around \u00a329,000.<\/p>\n\n\n\n

Thirdly, what if you average 25 hours and can only charge \u00a327? Now, your wage would be around \u00a323,000.<\/p>\n\n\n\n

And finally, what if you don\u2019t get anywhere near an average of 25 hours in your first year? Will it be enough to pay your bills?<\/p>\n\n\n\n