So what will I earn as a driving instructor after my overheads?
Being self- employed means that you will be keeping your own records and books. Some of your costs for the year may go on ‘overheads’. Overheads are defined as costs or expenses to do with running your business. The worst thing that any driving instructor can do is assume that his/her over heads are going to be minimal and that lessons are going to be consistent every week, however, due to Homers Driving School generating the leads for your new franchise, work should be plentiful especially within the areas in demand such as; Wednesfield, Willenhall, Tipton, Darlaston and Wolverhampton.
Examples of overheads are elements such as: stationary, fuel, service checks, your instructing car, a phone etc.
This is an example of one year’s wages after overheads,
Lessons based on £24 per hour x 40 hours per week x 48 weeks= £46,080 (turnover)
(This includes 4 weeks for holidays/sickness/quiet periods etc)
Total income £46,080 per annum
- Homer’s Franchise fee £60.00 per week x 50 weeks = £3000.00
- Fuel & maintenance/servicing/other vehicle costs = £4,000
- Vehicle lease fees or loan payment = £2500.00
- Business overheads = £1000.00
- Insurance = £375.00
- Accountant = £275.00
- Phone= £120.00
- ADI badge= £75.00
Total deductions are £10,345
Therefore the total income is £35,735
So by this approximate guide of earnings, this particular instructor ‘take home pay’ would be in the region of:
£700.00 per week before tax
You could earn much more than this or much less! Bear in mind you also have a good quality car included in this. Private car expenses are approx. £6000 per annum. Taking this into account the equivalent PAYE salary could be up to £45,000 per annum in theory.
Unfortunately a 40-hour week means 50 hours when you take into account the running in between, and due to cancellations and quiet periods look at a 25-30 hours week as being realistic and adjust figures accordingly to your diary. If students have late cancelations they could be liable to pay you the full cost of the lesson. In which case you wouldn’t lose money, however, some students may contest this.
Part time instructors
Part time instructors will need to cut down on their outgoings and generally keep cars longer. They usually operate independently and do not pay franchise fees.
Whether you work for yourself, under a franchise for a large company, under a franchise for a small company, if you buy your own car, lease your own car, have a car provided etc the figures generally work out very similar.
You need to get yourself recognised and from then on work is always available nationwide and remember learners are the tip of the iceberg.
Bearing in mind these figures are based on £24 per hours lesson, many companies charge far more than this dependent on the area covered. Lessons can be as expensive as £28.50 per lesson locally with other instructors. Therefore, earnings should be re calculated based on what you are going to charge your students.
Will I really need an accountant?
The answer to this question is yes! Unless you have an accounting background yourself, it is wise to invest in an accountant so you make sure that you are paying the correct taxes and national insurance.Posted on