Are you a small business owner that has researched the possibility of hiring a Virtual Assistant to handle tasks that you can’t seem to get off your to-do list? Do you wonder why VA pricing seems higher than an on-site, in-house administrative assistant? The following article will explain not only the difference in pricing between an on-site office administrative assistant and a virtual assistant, but it will also explain how the two differ in accountability. Contracting with a VA can actually be a cost-saving over hiring a full-time, on-site administrative assistant! Read on…
On-Site, In-House Administrative Assistants
On-site administrative assistants are considered employees and will look for benefits such as: medical, dental, vision and life insurance and paid time off. You, as the employer, will have to provide them with office space in your building, furnishings and computer equipment and programs. As a business owner, you are also legally responsible for withholding their taxes and providing W-2s at the end of the year. Most small businesses go through lulls and busy periods, but, when they hire an employee, that employee must be paid whether they are busy or not!
As of 2017, the (average) rate for an in-house administrative assistant was $38,000/year or $23.00/hr., based on a 35-hour workweek. Click here for the full article: Bureau of Labor Statistics: What does an Administrative Assistant handle?.
Because of today’s technology, virtual assistants can handle the typical in-house day-to-day duties that, in the past, could only be accomplished by an on-site administrative assistant. So how are they different?
Virtual Assistants (1099 Contractors)
Virtual assistants are small business owners also (not to be confused with AI such as Siri or Alexa). When you work with a VA, you will be hiring them as a 1099 Contractor. As a 1099 Contractor, VAs are solely responsible for paying their own Federal, State, and Local taxes and covering their own medical, dental, vision and life insurance. They also supply their own equipment, internet, office space, furniture, and furnishings.
The following link provides you with a more complete description of a VA. The article was published in Wikipedia and is a good overview of the VA business. Wikipedia article: What is a VA?
When you contract with a VA, it is not a boss/employee relationship; it’s two equals collaborating to create a work/life balance. They will work with you as collaborators; versus being a tasker. Many VAs specialize and get certified in specific niches, such as digital media marketing and strategy, website development and project management, to name a few.
Virtual Assistants have been around for quite some time. A great article about the history of VAs can be found here The History of Virtual Assistants.
As with any contractor, VA rates can vary greatly, depending on the type of assistance your business requires.
At first glance, it may seem as though you will be paying more for a skilled Virtual Assistant but, if we look at it from a tax perspective, as shown in the table below, it paints a different picture.
|In-House Administrative Asst. (U.S.)*||Virtual Assistant|
|$23.00/hour||$30.00-$50.00+/hour (for example only)|
|Social Security Tax withholding = 6.2% of gross wages||No additional bookkeeping headaches|
|Medicare Tax withholding = 1.5% of gross wages||You pay only for the services requested, nothing more/nothing less|
|Health insurance = up to an additional 25% of wages|
|Sick, Vacation & Holiday pay|
|Equipment (computer, printer, fax, telephone)|
|Office Space (furniture and furnishings)|
|Paying for coffee, bio and other breaks**|
*These numbers could vary, based on the country location of your business. Taxes quoted are for U.S. employers.
** Studies have shown that an employer can be paying up to 20% of an employee’s salary for ‘wasted time’
We hope you found this article informative. It has highlighted some factors that make VA pricing appear higher than an on-site Administrative Assistant, while explaining how contracting with a VA can potentially be a cost SAVINGS for your business.
If you are considering contracting with a virtual assistant, IVAA offers a free RFP system for you. Simply post your requirements and our members will reply to you with their proposals. Click here to learn about submitting an RFP
Karen Kannegiesser is the owner of Lotus Business Resources LLC.
She helps heart-centered entrepreneurs and small business owners who are frustrated by having to run their business manually, and who struggle with trying to scale their business.
Karen works with her clients by automating their business processes and by handling their digital media strategy and management, which enables them to
work ON their business, instead of IN it!
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