Tutors are in high demand in the U.S. and, as a result, they are paid well for their services. Tutors have two options when it comes to online tutoring jobs: they can work for themselves or they can work for an online tutoring company.
Tutors who work for themselves may charge whatever amount they want, as long as it is within reason and they have clients who are willing to pay it.
The amount tutors charge per session also depends on his or her location, since big cities like New York City tend to have a greater demand for tutors, which can drive up the price. Tutors who work for themselves tend to make more than tutors who work for online tutoring companies but they are also responsible for finding and managing clients on their own.
Tutors who work for an online tutoring company are limited to whatever that company pays its tutors. Some online tutoring companies pay better than others and generally, the more education and qualifications a tutor has, the higher the pay.
Generally, tutors with a college degree make more than tutors without a college degree at most online tutoring companies. The upside is that online tutoring companies will help you find and manage clients and receive payments.
How Much Does Tutoring Pay Exactly?
Tutors who work for online tutoring companies are typically paid about $12-$20 per session, depending on the tutor’s level of expertise and how or where they found their clients. Tutors who are proficient in more complicated topics such as SAT subjects are paid more. Most online tutoring companies also deduct a fee from tutor’s payments.
According to this article in the New York Times, the average rate for tutors who work for themselves is between $45-$65 per one hour session, except in Manhattan in New York City where the average rate is between $85-$150 an hour.
How Do I Collect Payments?
If you work for yourself, your clients can pay you however you’d like: in cash, by check or via Paypal. If you’d like to keep a record of payment requests, you can even send invoices through your Paypal account.
If you work for an online tutoring company, the company will collect the payments for you and then pay you by whatever method they prefer. Payments are typically sent via direct deposit or Paypal.
What Taxes Do Tutors Have to Pay?
You are required to file taxes and pay self-employment tax if you made more than $400 through self-employment in a calendar year. Tutors, whether they work for themselves or for an online tutoring company, are self-employed.
According to the IRS, self-employment is defined as a profession in which a person offers their services to the general public. These types of workers are considered independent contractors.
The self-employment tax rate, which is 15.3% of your net earnings, is higher than an employee tax rate, which is 7.65% of your net earnings. This means you’ll pay twice as much in taxes as a self-employed person than you would if you had a regular job as an employee.
That is because you are paying taxes as both an employee and an employer (employees pay 7.65% of their net earnings and employers pay 7.65% of their employees net earnings.) This is something you might want to keep in mind if you are considering becoming a tutor.
Also, if you make over a certain amount, you may have to pay quarterly tax payments throughout the year, which is known as estimated tax. You generally only have to pay estimated taxes if you expect to owe $1000 or more in self-employment tax at the end of the year.
If you fail to pay your quarterly tax payments you may have to pay a tax penalty at the end of the year. The penalty is waived though if you paid at least 90% of your estimated tax that year or if you paid 100% of your estimated tax the year prior, whichever amount is smaller.
The penalty may also be waived if you failed to pay the tax due to a natural disaster, casualty or other unusual circumstance or you retired or became disabled that year and couldn’t afford the tax payments as a result.
Overall, online tutoring jobs pay well, even if you do have to pay more in taxes than if you had a regular job, and they aren’t that difficult to do which makes tutoring a great online job for college students.
Department of Treasury: Exemptions, Standard Deduction, and Filing Information: www.irs.gov/pub/irs-pdf/p501.pdf
IRS: Frequently Asked Questions: www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Filing-Requirements,-Status,-Dependents,-Exemptions
IRS: Estimated Taxes: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes
IRS: Independent Contractors: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Defined
Tutor.com: Tutoring FAQ: www.tutor.com/apply/tutoring-faq#pay
Jobmonkey.com: Tutor FAQ: www.jobmonkey.com/workathome/tutor-faq/
New York Times; As Private Tutoring Booms, Parents Look at the Returns; Paul Sullivan; Aug 20 2010: