As a freelancer, figuring out how much your time is worth can be one of the most challenging tasks and it can take time to learn what different kinds of projects require, and therefore, should cost. Certain assignments may pay less but take a short amount of your time so they end up being worth it, while a much bigger endeavor may come with a bigger paycheck but might end up taking over your life! As you venture out into the world of freelance work, it is key that you figure out your rate. Now granted, you can only charge what the market will bear (meaning, as much as you can convince someone to pay you), but there are some ways for you to determine what your GOAL rate is.
Lynn Wasnak of NJ Creatives writes:
“To choose the income target you want from freelancing, remember that as an independent business person you must pay all your overhead, health benefits, vacation pay, retirement savings and taxes. Also, you must set aside regular time for marketing, accounting, and other non-billable work. Total cost of living, expenses, and overhead are then divided by billable hours to figure the minimum per-hour rate you need to stay afloat. Billable hour estimates range from 1,000 to 1,500 hours per year. A quick ballpark estimate takes hourly rate X 1,000 hours to project potential annual income i.e., $55/hour X 1,000 hours = annual income of $55,000. (To fulfill this goal, though, you need 1,000 hours of billable work!)”
Here are a few tips for figuring out your rates as a freelance designer. You need to charge based on:
What the client is really asking for
What kind of components and features do they want? How complex will they be to build? Building someone’s personal blog versus a site for a booming business will clearly show some cost variation. You should charge more for adding things like forums, ecommerce, opt-ins, memberships, and other custom functionality. One of the biggest challenges that any freelancer has to deal with is changes in the project scope, thus you must also take into account…
How demanding the client is
Is this a client that is just be going to be like “Do your thing! Alright, alright, alright” (the client is Matthew McConnaughey apparently) or are they going to be micromanaging and in your face and in your ear constantly. Like Sunday morning emails and whatnot. If they are cutting into your personal time or taking up a lot of extra time on the phone or meeting with you then that needs to be factored in (freelancers sometimes refer to this as the a**hole tax). Of course, you also have to think about…
Your level of skill
You need to be honest about how much experience you have with different kinds of projects. You may not have as much expertise when it comes to what your client wants and you may not be able to do it as well as another designer, or maybe it will just take some extra time and research for you to accomplish. Look, let’s be real, this is where experienced people win over beginners: the more experience you have with a project, the more you can charge, and the faster you will get it done. On the other hand, beginners get paid to learn, so it all evens out in the wash, right? One thing to consider is whether you should be…
According to NJ Creatives Network, on the low end designer hourly rates hover around $40, while the high end is about $75 (though many designers charge $100 or more an hour), with an average of $59 an hour.
However when you say you are charging per hour there are certain things that can’t be included, according to blogger Miranda Marquit. If you have to learn a new skill you can’t charge the client because you accepted the project knowing the expectations and that education will help you get more jobs. Sometimes, you can just discount the hours you spent learning, while other times it might make more sense just to bill the client a flat rate for that project.
You also can’t charge for lost time when you make a mistake. Marquit wrote, “However, if the client continually changes his or her mind as to what he or she wants, you are justified in billing for those hours. But if it’s your mistake, or if the client is unhappy, you might need to do a little extra work without billing, or offer a discount.” And like most things, there are no hard and fast rules here, just your gut and your relationship to your client!
Designers also often have different hourly rates for different functions (designing, coding, testing, etc.).The main advantages of charging by the hour is that it is the most straightfoward way to handle billing and it allows the client to have flexibility if they want to add on additional tasks, plus, they get a bonus for being easy to please (aka not putting you through endless revisions)-billing by the hour is very transparent. That said, client’s don’t always take well to seeing that they ran up your hours, so beware! In those instances it might be better if you instead are…
Charging by the project
You can also charge by standard packages that includes a certain amount of work that you always do. Designers usually base how much they charge on the amount of time the project will take (in effect, an hourly rate) based on past experience and/or on what the market will bear (for example, a VC funded startup can maybe pay more than a local non-profit). If neither hourly NOR project based suits, consider…
Charging by the page
This is probably the most rare payment method but some designers do utilize it. This usually only makes sense for designers who produce relatively simple marketing style websites, but it’s another mode of charging you should consider.