Freelance Income: To Spend Or Not To Spend?

Many people seem to think that, once they start earning a paycheck as a freelancer, they can quit their day job and live The Life. That’s partly true, but only partly. An old cliche’ saying tells us not to count our chickens before they’ve hatched. What that means is that in publishing like with eggs, things can go wrong before the chicken — or the publishing project — hatches. In short, don’t commit your earnings until the check is deposited in your bank account AND it clears.

Because of the way most writing contracts are structured — in the tabletop gaming industry, at least — freelancers are usually paid 30 days after publication. Using myself as an example, I wrote a considerable amount of text for some support material for a tabletop RPG during the summer. That project was for a support book for a product line. The core book for the line has not hit store shelves yet due to a glitch in finding a partner who can get the product out into the various sales channels. That means the book I worked on has not yet been published. Since the book that’s already printed and paid for (and for which I was paid, by the way) can’t be sold yet, there’s no money coming in from it to pay the print bill on the new book, so the new book waits until cash flow improves. According to the original publication schedule as I understand it, that new book should have been published in January of this year, meaning I would have been paid for it by now, in late February — or in the next week. There is at least one other book in the queue ahead of the new book, meaning maybe I’ll see that big investment in time and word count get published this summer.

If you’ve been paying attention to the gaming business, you already know that things rarely are published to a precise schedule. Smaller companies live and die by cash flow, and if anything happens to disrupt or delay that flow — a retail or wholesale customer or a printer going out of business; a catastrophic injury or illness to one of their key freelancers on a project; the freelancer dropping off the face of the earth, refusing to respond to contact attempts and not turning in their work on time, if at all, for example — the product suddenly is delayed. In the case of the customer going out of business, this rarely happens with a clean slate; the customer doubtless owes the company money, meaning that cash flow takes a hit. That money isn’t coming back.

Even during receivership, people owed money by a bankrupt firm get pennies on the dollar, if they get anything at all. Sure, that loss can be written off on taxes at the end of the year, but that doesn’t help cash flow NOW, when salaries and print bills are due. Also, writing off something is not a dollar-for-dollar exchange. A fraction of what was owed — usually less than half — can be claimed in this way. When we’re talking about thousands of dollars owed, getting only half of it or less is tough to swallow.

That’s just one example of how a freelancer might not get paid in a timely fashion. There are plenty of other examples, not the least of which is malfeasance on the part of the publisher, which, while fairly rare, does happen. To avoid companies like this, ask around; many freelancers will be willing to talk about companies they’ve worked with, off the record.

So let’s say you’ve done everything right: turned in your work as specified in the contract — on time and meeting word count. Let’s say that work is approved and accepted for publication, and any changes required have been dealt with satisfactorily. What next? If you’re a freelancer, you wait. And wait. If you have bills to pay and you depend on that money to pay them, then welcome to the world of being professional writer.

Most contracts I’ve seen in the business specify payment is due to a freelancer 30 days after publication. If the project gets cancelled, if the company doing the publishing goes out of business, or if the project gets revised before publication and the stuff you wrote gets edited out, you as a freelancer, get nothing. There are clauses that stipulate a “kill fee”, meaning that if the project is cancelled or rejected for reasons having nothing to do with the quality of the writer’s work, the writer receives a small percentage (often 10% or less) or a flat fee as compensation. Kill fees are very rare in the tabletop gaming field.

So let’s assume you get paid, on time and in full. Since you are a freelancer, no money for taxes, Social Security payments, and so forth was deducted from that check. You as the freelancer (also known as a contractor) still OWE that money to the government. In fact, you also owe the publisher’s share of your Social Security deduction.

(In case you didn’t know, both the employer and the employee pay into the Social Security fund — in roughly equal amounts — a small percentage of the employee’s wages. This money is held in trust towards that person’s retirement. If the employer doesn’t pay in their share — which is perfectly legal for them to do under the circumstances — you are responsible for that money being paid in. If you were paid $100 for some writing, you would get to keep roughly $80 or so after all is said and done. So you already can’t spend that entire $100 paycheck. Remember too that taxes as they exist now are on a sliding scale; the more you earn in a year, the larger percentage you have to pay in in taxes.)

This is why so many people advise aspiring writers DON’T QUIT YOUR DAY JOB! It seems to be snide and rude advice, but it’s terribly true: freelance writers, unless they are INCREDIBLY lucky and very good at what they do, will not make anything like a living wage from their writing. The saying is crude, but the maxim “shit flows downhill” is appropriate, and freelancers are at the very bottom of that hill. As a freelancer you will be the last to be paid, and the first to be stiffed if anything goes wrong.

It’s not pure bitterness on my part in writing this: it’s a fact of life as a freelancer, and depending too much on that income can lead to desperate financial straights. Being a freelance writer can be delightfully rewarding, but pie-in-the-sky attitudes of being able to retire after only a few years as a writer are foolishly naiive. If you must quit your job to write, at the very least hang onto a part-time job: it will provide regular, steady income, the time commitment will be smaller allowing more time for writing, and if you get lucky and strike it rich as an author, you can quit easily and without regret.

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