IT Support rates per km question

JRJakkals

JRJakkals

Active Member
Joined
Nov 13, 2019
Messages
43
Reaction score
3
Location
Centurion
Hi Everybody

So I have my own new IT company. Today another IT company contacted me and ask if I will be willing to do sub-contract work for them. They want to charge me R3,10 per km. The AA rates on my car is R6,08.
Average Running Cost (R/km) R1,34
Average Fixed Cost (R/km) R4,74
Total AA Rate (R/km) R6,08

So my question is, am I right or wrong to charge R6,08 per km?
 
Depends -you charge whatever you want - they either accept or don't, you in business to make money.
But other factors such as what is the distance you have to travel, how many days, how much are you making from the actual job and if you decline do you have alternative work lined up?
 
I am a freelance IT training consultant & often had to travel to NW Province, Limpopo & Mpumalanga when doing offsite desktop applications training for clients, mostly at mines or industrial plants.

1617720605773.png

This was the AA Rate for my car - a 2008 Tata Indica LXi (aka CityRover) - 1.4 petrol engine - annual distance travelled between 10k & 15k kms - as at Nov 2018, when petrol was R17,08 per litre.

Most clients were reimbursing me at about R3,00 per km back then - so R3,10 in 2021 is VERY low - I would suggest you make an amenable compromise at around R4,00 per km and see if they are agreeable to that amount.
 
JRJakkals said:
Hi Everybody

So I have my own new IT company. Today another IT company contacted me and ask if I will be willing to do sub-contract work for them. They want to charge me R3,10 per km. The AA rates on my car is R6,08.
Average Running Cost (R/km) R1,34
Average Fixed Cost (R/km) R4,74
Total AA Rate (R/km) R6,08

So my question is, am I right or wrong to charge R6,08 per km?
Click to expand...

Ask them if they'll pay you R2000p/h.
 
JRJakkals said:
Hi Everybody

So I have my own new IT company. Today another IT company contacted me and ask if I will be willing to do sub-contract work for them. They want to charge me R3,10 per km. The AA rates on my car is R6,08.
Average Running Cost (R/km) R1,34
Average Fixed Cost (R/km) R4,74
Total AA Rate (R/km) R6,08

So my question is, am I right or wrong to charge R6,08 per km?
Click to expand...


You would have to pay me at least R4.20 a minute to come fix my IT stuff.
 
JRJakkals said:
Hi Everybody

So I have my own new IT company. Today another IT company contacted me and ask if I will be willing to do sub-contract work for them. They want to charge me R3,10 per km. The AA rates on my car is R6,08.
Average Running Cost (R/km) R1,34
Average Fixed Cost (R/km) R4,74
Total AA Rate (R/km) R6,08

So my question is, am I right or wrong to charge R6,08 per km?
Click to expand...
If you believe that the AA rate is fair, then stick to your guns. Alternatively, you can increase the cost per hour / call, but if they send you on a lot of long-distance trips, you may end up carrying the short end of the stick. It would be good to find out how negotiable they are on the km rate, if it's in concrete then it may be better to "recover on the swings what you lose on the roundabouts".
Another thing to consider is tax, what are the implications (VAT) of upping your rate and lowering your km rate?
Finally, are they going to guarantee a certain amount of work (hours) per month? If so, it may be worth considering the lower R /km rate, but just make sure then that they do not tie you into an exclusivity contract.
 
You just give them the AA rates of your car and that's pretty much the end of the discussion tbh. If they're already trying to haggle on something that is pretty much a fixed cost with no real alternative, then you should be quite wary of going into business with them.

And R6/km really isn't much, again would be worried why they're haggling that much for it as that would mean they're probably going to sub contract clients that are non profitable for them to you in terms of too far distance etc. And would lose them hours.
 
It depends, you cant expect to be paid a lot more than average just because you drive a Bentley for instance. To be fair I would take the typical sedan AA rate as a fair amount. R3,10 sounds too low though.
 
Some companies charge low kilometer rates but then also charge per hour for driving to the site.
Our company charges R6.50 per kilometer which also covers some of the hours spent driving to the site.
 
What is the difference between the Average Running Cost, the Average Fixed Cost and the Total AA Rate?

Is one just fuel and the other for services and wear & tear and the Total AA Rate is the addition of both?
 
The average fixed cost is the just the fuel used per kilometre - based on the prevailing fuel price & your vehicle's average fuel consumption figure.

The average running cost factors in additional costs such as distance travelled per year, periodic servicing costs, maintenance plans (if applicable) & vehicle insurance, amongst other costs - for example, like the excess due when a cracked windscreen is replaced, or you buy a new battery / fit new tyres or an exhaust.

Add these both up and that gives you the total AA rate for your vehicle, based on the details you provided for their Rates Calculator.

This explanation from the AA website provides additional clarity of just how the AA rate is calculated:.

The type of car you drive, how you drive, the fuel you use (and where you fill-up), the tyres you use, the terrain you drive on, the kilometres you drive daily, weekly, monthly and annually, and the insurance cover you have on the vehicle are just some of the factors you need to consider when calculating the true cost of keeping your car on the road.

Things such as maintenance and service plans, instalment payments, and unexpected expenses such as cracked windshields and windows (which, for a small number of owners is covered by insurance, but even this may require excess payments), should also be factored into the total cost of ownership of a vehicle.

If, for instance, your drive a small sedan at the coast, the total AA rate calculated on the vehicle may be R 3,35 per driving kilometre which amounts to R 67 000 if you drive 20 000 km a year. An SUV driven inland over the same distance is going to be markedly more expensive – around R 137 000 per year, or R 3,75 per day.

But, importantly, this doesn’t only cover the cost of fuel, it also covers all costs associated with keeping the car on the road. People working on a budget, especially in these tough economic times, must keep a track of these expenses to ensure their vehicle is adequately covered financially at all times.
Click to expand...
 
Ivan Leon said:
The average fixed cost is the just the fuel used per kilometre - based on the prevailing fuel price & your vehicle's average fuel consumption figure.

The average running cost factors in additional costs such as distance travelled per year, periodic servicing costs, maintenance plans (if applicable) & vehicle insurance, amongst other costs - for example, like the excess due when a cracked windscreen is replaced, or you buy a new battery / fit new tyres or an exhaust.

Add these both up and that gives you the total AA rate for your vehicle, based on the details you provided for their Rates Calculator.

This explanation from the AA website provides additional clarity of just how the AA rate is calculated:.
Click to expand...
Thanks so much for the explanation.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X