Question 1

1. What is the Living Tariff?

Accepted Answer

The Living Tariff refers to the amount that self-employed or gig worker need to earn per day to achieve a living wage. It include not only daily living expenses, but also include the cost of resources required for your work, such as work equipment costs, overhead costs, taxes, social security, and savings in case of illness and retirement. Considering these additional cost factors will help ensure that your income is sufficient to cover all the necessary costs associated with your work

Question 2

2. What is a gig worker? How is it different from freelancer?

Accepted Answer

A gig worker is someone who takes on short-term tasks, often referred to as "gigs" for various clients or platforms. They usually do most of their work through platforms marketplace. Gig work can be anything from driving for a ride-sharing service to doing tasks on online platforms.A freelancer is a self-employed skilled professional who offers their specialized services to clients on a specific project-by-project basis.Both the terms "gig worker" and "freelancer" can mean the same thing. Gig worker usually refers to performing various short-term, task-oriented work, while freelancer usually refers to a skilled professional who offers specific services on a project basis.

Question 3

3. Why is Living Tariff important for me?

Accepted Answer

The Living Tariff is essential for gig workers because it provides an overview of your actual income, helping you understand what a minimum tariff should be for your profession to maintain a decent standard of living. It allows you to make well-informed decisions about your work and income.

Question 4

4. What is Living Tariff Tool?

Accepted Answer

Living Tariff is a tool designed for gig workers to easily check and calculate their tariffs based on their type of job and the cost of living in the region. It considers all the costs associated with their work, including resources, waiting time, and savings for things like sickness and retirement.Essentially, it helps gig workers understand how much they need to earn to achieve a sustainable income that covers their living expenses

Question 5

5. Why did WageIndicator create Living Tariff Tool?

Accepted Answer

WageIndicator together with GIZ developed the living tariff tool for gig workers in response to the exponential growth of the gig economy in the past decade. With an increasing number of individuals relying on gig work as their primary source of income, there emerged a pressing need to address the challenges faced by gig workers in determining fair compensation for their labor. The gig economy's rapid expansion had given rise to a complex platforms and job types, each offering a diverse range of tariff rates. This variability made it challenging for gig workers to assess the true value of their work, often leaving them uncertain about whether they were receiving fair compensation for their services. Consequently, WageIndicator recognized the necessity of creating a living tariff tool to empower gig workers with a means to comprehensively understand and determine a minimum rate for a decent living

Question 6

6. What is the objective of Living Tariff Tool?

Accepted Answer

The objective in creating a living tariff tool for gig workers is to:- Empower gig workers by offering them a free and easily accessible tool that calculates fair tariffs, ensuring they receive just compensation for their work.- Provide insights into tariff benchmarks, enabling workers to make informed decisions about their gig work and negotiate better payment terms.- Promote transparency in the gig economy and facilitate more equitable compensation practices, thereby reducing information imbalances between gig workers and employers.- Utilize data-driven calculations based on extensive research on various job types, WageIndicator Living Wage data, and legal standards to provide accurate and up-to-date information.- Contribute to the broader discussion on gig worker rights and fair labor practices by addressing compensation issues within the gig economy.- Commit to continuous development and refinement of the tool, incorporating user feedback and adapting to changing economic factors to ensure its ongoing relevance and effectiveness

Question 7

7. Who can use Living Tariff Tool?

Accepted Answer

The Living Tariff Tool can be used by self-employed and platform workers who are paid per job, as well as others who perform work described in the tool. It provides insights into the income needed for various professions.

Question 8

8. I do not work via a platform, but I do perform work described in this tool. Does the Living Tariff then also apply to me?

Accepted Answer

Yes, the Living Tariff applies to anyone performing work described in the tool, whether they work through an online platform or not. Users can adjust certain variables to better match their personal situation.

Question 9

9. How was the Living Tariff calculated?

Accepted Answer

The Living Tariff is composed of four main components:A. WageIndicator’s Living WageB. Work-related equipment costC. Overhead costD. Income taxes and social securityThe total of the four components above makes the minimum Living Tariff(A) + (B) + (C) + (D) = Living Tariff

Question 10

10. What is WageIndicator’s Living Wage?

Accepted Answer

The WageIndicator Living Wage is the income that a worker should receive to have a decent life according to cost-of-living survey done by WageIndicator. The Living Wage is higher than the legal Minimum Wage in some areas and covers various essential expenses to ensure a decent standard of living.

Question 11

11. What is covered in the WageIndicator Living Wage?

Accepted Answer

The WageIndicator Living Wage includes various expenses such as:- Food- Housing and utilities: water, electricity, heating, garbage collection, routine maintenance, cooking fuel- Transport- Drinking water- Phone- Clothing- Health- Education- 5 percent provision for unexpected eventsTo know more about how WageIndicator Living Wage is calculated, please head over to FAQ Living Wage

Question 12

12. Are the housing costs based on single or family accommodations?

Accepted Answer

In the Living Tariff tool the costs of housing is based on a 3 bedroom appartment.

Question 13

13. How are transport costs estimated?

Accepted Answer

The Living Tariff Tool calculates two types of transportation costs:Transportation cost is included in the Living Wage componentThis covers expenses for a monthly pass for public passenger transportation in most places, assuming that each household member should be able to afford a transportation card. In other areas, the price of a one-way ticket to the nearest town in local transport is converted to a monthly amount.Transportation cost is included in the work-equipment componentThis refers to transport costs related to the job, including the vehicle (car, motorbike), fuel, services, etc. For example, this applies to taxi drivers or riders. The data are collected in a specific section of the WageIndicator Cost-of-Living survey called "Occupational related items," and these prices are used to calculate Living Tariffs for gig workers.

Question 14

14. How is the transportation cost calculated for gig workers specifically on the transportation platform?

Accepted Answer

Gig workers, particularly those using transportation platforms, face higher transportation costs compared to average workers due to their increased mobility. The transportation costs for gig workers on the transportation platform are calculated separately, and they are included in the work-equipment component. This calculation takes into account the vehicle costs (car, motorbike, bike, van), which include fuel, services, helmets, etc. We source these costs from the WageIndicator cost of living survey. Additionally, we make assumptions about the average kilometers traveled by delivery personnel, based on statistics from a delivery company. Specifically, we assume 250 km/week with a fuel consumption of 0.045 liters/km for a motorbike, and 220 km/week with a consumption of 0.066 liters/km for a car

Question 15

15. Does the tool offer adjustments for workers who have dependents or are the sole breadwinners in their families?

Accepted Answer

The Living Tariff Tool is based on the Living Wage concept, and it assumes specific family compositions to calculate the living wage. Adjustments for dependents or sole breadwinners are not available in the tool.

Question 16

16. Why is the Living Wage in some areas lower than the applicable Minimum Wage?

Accepted Answer

In general, the Minimum Wage is often relatively low around the world, with a difference of up to 80% between the Minimum Wage and the Living Wage. However, in certain regions or countries, the Living Wage may be lower than the Minimum Wage. This happens when the Minimum Wage is considered "reasonably good" and meets the cost of decent living in that region. While the Living Wage Check tool is currently calculated based on the Living Wage, the WageIndicator team plans to adjust it soon to reflect areas (cities/districts) where the Minimum Wage is higher than the Living Wage.

Question 17

17. There are cases where the cost of living varies significantly between different regions or cities within the same province, and how does this impact the calculation of the WageIndicator Living Wage?

Accepted Answer

From our cost of living data, we observed differences in the components of the cost of living in certain regions being more expensive than others. The main factors causing this difference are the food and housing price components, these components have a greater impact than, for example, clothing. It is important to note that WageIndicator does not adjust the cost of living data by city/district but rather by province. This means that prices across any city/district in West Java contribute to calculating the West Java provincial Living Wage

Question 18

18. What is the work-related equipment cost?

Accepted Answer

Work related equipment costs refer to the expenses incurred by workers for the tools and equipment they need to perform their work effectively

Question 19

19. What expenses are covered by work related equipment costs?

Accepted Answer

Work-related equipment cost can include items like a laptop, smartphone, internet connection, phone credit, vehicles (motorbike and car) including fuel, services, a helmet, or a uniform

Question 20

20. What is the standard used for work related equipment costs? How do you calculate/assume the work related equipment standard use in this tool?

Accepted Answer

WageIndicator bases its calculations on the assumption that work equipment items such as cell phones, motorcycles, and cars have an average lifetime. Data on the cost of work equipment is obtained from WageIndicator's cost of living survey data and from this data we determine a certain period of time over which the value of each component is spread. For example, for cars, we set a period of 5 years of use.To ensure accuracy, we have consulted gig work experts and economists to identify the work equipment used in each job. However, on page 3, workers have the flexibility to adjust the costs expenses for work equipment according to their individual conditions.

Question 21

21. Are work-related costs for equipment one-time or recurring?

Accepted Answer

Work-related costs are reccuring cost. We assume that either a laptop, a phone or bike needs to be repaired and a new/second hand needs to be bought.

Question 22

22. Do they account for repairs or maintenance?

Accepted Answer

Yes. The work related costs do account for repair and maintenance of equipment. If you feel it is not suitable for you, we offer options on page 3 for you to customize the variables according to your situation.

Question 23

23. What is overhead time?

Accepted Answer

Overhead time refers to the time spent by self-employed or platform workers on activities related to their work, but not directly billable to clients.

Question 24

24. What is included in overhead time?

Accepted Answer

Overhead time includes various activities, such as:- AdministrationAdministration time includes tasks related to managing work, tasks, schedules, and other administrative responsibilities.- Acquisition and communicationAcquisition and communication time includes activities related to acquiring tasks and communicating with users and platforms for work-related purposes.- TrainingTraining time includes time spent on task-related training and skill enhancement to improve one's work capabilities.- Waiting time (between tasks)Waiting time includes the time spent waiting for the next job or task in professions like delivery and taxi. It is time available for work but not compensated.

Question 25

25. What is the standard used for overhead time? How do you calculate/assume the overhead time standard use in this tool?

Accepted Answer

The standard overhead could be seen in page two of the tool. We assumed the time and the equipment by consulting gig work experts and economists. If the worker does not agree, though, there is page 3 where these assumptions can be adapted.

Question 26

26. How does WageIndicator calculate overhead costs?

Accepted Answer

On the basis of page 2 in the tool you can see how WageIndicator assumes overhead per hour. Basically we transform minutes in time that should be paid for (the same as leave). This time is deducted from the total working hours and the amount per month is then divided by less hours, thus getting to a higher hourly rate (which covers for these costs).

Question 27

27. How do I calculate other specific expenses that I spend but are not included in the WageIndicator calculation on page 3? For example, a teacher needs special equipment for teaching, a handymen or hairdresser needs special tools for their work

Accepted Answer

On page 3, you have the flexibility to customize your specific expenses based on your situation and needs. We have added a "Your miscellaneous work-related costs" section, which allows you to enter all these additional monthly expenses in a lump sum, on top of the other expenses you have already entered. The system will convert them into hourly additional cost in the grand total

Question 28

28. What is the standard used for working hours standard?

Accepted Answer

WageIndicator use national Labor Law (Undang Undang No.13/2003 Ketenagakerjaan) as the legal standard for working hours. For Indonesia, the standard of working hours is 40 hours/week and 12 working days of annual leave

Question 29

29. What kind of employee is used as a basis of comparison for the Living Tariff? Is this based on a median wage, an entry-level wage, or some other measure?

Accepted Answer

The Living Tariff has as a basis the minimum what is needed to have a decent Life. It is based on cost of living, not on education or performence level.

Question 30

30. Why is there no variable to add information about the length of work experience of a gig worker? Because work experience can also affect the tariff

Accepted Answer

Currently, the Living Tariff Tool prioritizes to focus on calculating the living needs of workers, for which WageIndicator already has sufficient data to do the calculation. Therefore, we decided not to include the work experience variable. For now, the Living Tariff Tool is designed to address the core factors related to the cost of living and the additional costs (work equipment, overheads, taxes, and social security) associated with gig workers. However, it is possible to add the work experience variable for future features, as the Living Tariff Tool evolves with the feedback and experience of the tool's users.

Question 31

31. Can the Living Tariff Tool accommodate multiple jobs for gig workers, or do you need to combine all your calculations into one?

Accepted Answer

The Living Tariff Tool can show you how much you need to earn and work to have a decent life, whether you work for one platform or many. It can also be used to calculate multiple jobs or subcontracting scenarios, but you can do this by individually selecting the type of work you do.

Question 32

32. I cannot find the type of job that I do, what can I do?

Accepted Answer

If you cannot find your specific job in the Living Tariff Tool, you may choose a job that is similar or closely related to your own. The tool is designed to offer insights across various job, and choosing a similar job can provide a reasonable estimate.

Question 33

33. There is the same type of job in different platforms (e.g., translator) in the Living Tariff Tool, which one should I choose?

Accepted Answer

In the Living Tariff Tool, workers are expected to focus on choosing the type of work rather than the platform. For example, if you are a translator, you can choose the type of work first, and then choose the platform, because the type of work is the main determining factor. Note that the result will be the same whether you select "translator" from one platform or another. The type of work takes precedence in the calculation of the Living Tariff Tool.

Question 34

34. Is the calculation in the Living Tariff Tool realistic?

Accepted Answer

The Living Tariff calculation is based on averages and assumptions applicable to your country. While it may differ from what you currently earn through a platform, it is intended to demonstrate what you would need to earn for a decent income. Its realism depends on the cost of living in your region.

Question 35

35. Does the Living Tariff account for slower months where less work is available?

Accepted Answer

The Living Tariff assumes the needs for a full year on average, which means it does not specifically account for slower months with less available work. Extra financial planning may be necessary in such cases.

Question 36

36. Does the Living Tariff account for emergency funds, which are essential for financial planning, especially for gig workers with fluctuating incomes?

Accepted Answer

The standard version of the tool does not account for emergency funds, but in the customized version (page 3), users can add special reservations to account for financial planning, including emergency funds.

Question 37

37. Can the Living Tariff Tool be customized according to my needs and/or situation?

Accepted Answer

Yes, you can adjust certain variables to suit your needs, such as working hours, cost of supplies, retirement savings, health costs, and overhead time. You can do so by filling in the numbers on the third page of this Living Tariff Tool to better suit your personal situation

Question 38

38. How adaptable is the Living Tariff to economic changes like inflation or recession?

Accepted Answer

The tool is updated quarterly to reflect changes in the cost of living, making it adaptable to economic changes like inflation or recession.

Question 39

39. How often are the Living Tariff Tool calculation updated to reflect changes in the regulation and Living Wage (cost of living)?

Accepted Answer

The Living Tariff Tool is updated every quarter to reflect changes in the cost of living, but it may not specifically track changes in regulations.

Question 40

40. Is there a mechanism in the Living Tariff Tool that alerts users when the data is outdated or when new updates are available?

Accepted Answer

Users who subscribe to the newsletter receive updates, ensuring that the tool remains current and that they are informed of any changes or updates.

FAQs - Living Tariff