Nifty freelance rate calculator

July 31st, 2007

adding-machine.jpgAlmostGotIt‘s comment on a recent post of mine raises a question I hear a lot: How much more should I charge as a freelancer? Is there a hard-and-fast rule or formula? I’ve also heard a variety of percentages we freelancers should be charging above the corresponding employee rate — 30% more, 40% more, 50% more, etc. (Here’s one take on what to charge.)

But rather than worry about whether I’m living up to some universal formula of freelance wages, I’m most concerned with whether I’m pulling in enough money to cover my business expenses, unbillable hours worked per project (invoicing, contract negotiations, and the like), personal benefits, tax requirements, and living expenses. And of course, I’m concerned about whether the rate is fair for the industry, geographic region, and my experience level.

Of course that means doing the math and necessary research, but I think crunching the numbers yourself can help boost your confidence when it comes time to haggle with clients. If you know you need, say, $500 a day to cover your business and living expenses, you won’t settle for anything less.

I offered up some negotiation tips here. But today I wanted to direct your attention to this cool hourly freelance rate calculator. I especially like the “here’s your break-even rate” feature. I think this information can also help you strengthen your negotiation skills. If you know a client’s only willing to pay 2% above your break-even rate, it will be easier to stand your ground and walk away if necessary (that is, if you’re looking to do more than merely cover your business and living expenses and would like to make an actual business profit). My one gripe about this calculator is that it doesn’t have a field for utilities other than telecom, but you can add that in with the rent or “other expenses” fields.

Entry Filed under: Ask the Cubicle Expat,This freelance life

10 Comments Add your own

  • 1. almostgotit  |  July 31st, 2007 at 2:58 pm

    Wow, thanks — this is very helpful! I don’t know if I’d like to freelance forever, but after yet another failed interview (boo hoo) I really need to spend more time being business-like about this part of what is, currently, my business!!

    While freelancing is a wonderful thing (and often a necessary thing) on its own, I’d never thought of its usefulness as a career placeholder for those who may wish eventually to rejoin the world of benefits, support staff, and predictable salaries & schedules. Here’s an article on the subject which I recently found very helpful.

  • 2. How to (almost) get the j&hellip  |  August 1st, 2007 at 9:57 am

    [...] As it appears I will either be freelancing (or panhandling) for some time yet, I’ve got some more homework to do. The Anti 9-5 Guide answered my questions in a recent post, which also sources a good freelance rate calculator to get folks like me started. [...]

  • 3. Christian  |  August 1st, 2007 at 2:30 pm

    I think I did something wrong on the freelance rate calculator. It told me I should charge $13/hr, which I assure you, I could not live off of. I love your blog. I don’t have the book yet, but I’m going to buy it :-)

  • 4. Michelle Goodman  |  August 1st, 2007 at 3:45 pm

    Christian (and everyone else who’s sent nice notes and posted nice comments this summer), thanks for the kind words. If you figure out how to live on $13/hr, I’d love to know your secret! ;)

  • 5. Lisa  |  August 21st, 2007 at 1:52 pm

    This is a fabulous tool for freelancers. I have linked to it in my blog and linked to your main page, as I think it will be a huge help for work at home moms. Thanks.

  • 6. Michelle Goodman  |  August 25th, 2007 at 3:42 am

    merci, lisa! and welcome to the freelance pleasuredome…

  • 7. Max Tutein  |  September 22nd, 2007 at 9:38 am

    I’ve been looking for a rate calculator that doesn’t use a long interview and found one on a page called Skillserv. It could use some fields for additional expenses, but I like the single page presentation.

    The site has a couple of other calculators that you can get to if you register, haven’t checked them out yet.

  • 8. Michelle Goodman  |  September 23rd, 2007 at 2:01 am

    thanks, max. great tip!

  • 9. Phyllis Fletcher  |  November 25th, 2007 at 7:49 pm

    Michelle! I love your blog and your book. I recommended both to a friend today, and got sucked into your blog in the process. I’m so glad you shared this calculator with people. I have a full-time job, and I freelance, in an industry that’s flush with cash but notoriously cheap. When clients in my industry hire a freelancer, they often offer the job at a lowball rate that’s based on an underestimation of the actual work involved. After a misunderstanding over payment, I made a rate sheet and posted it on my website. When someone wants to hire me, I refer to my rate sheet, make an estimate, and send it to the client along with a link to my rates. Only once has a client balked, because they were on a budget that was genuinely small. It was a small and easy job, so we negotiated a compromise I was OK with.

    Most of the people who take the kinds of freelance jobs I refer to are just getting started in my industry, and many of them are women. So I always share my rate sheet idea and, if a person is interested, my actual rates. That’s my contribution to helping freelancers in my industry–pat me on the back, please! ;P Sike. Great blog, Michelle. I’m sure I’ll send others your way.

  • 10. Robin Donovan  |  January 26th, 2011 at 8:01 pm

    I’ve made it on less than $13, but it is rough! Requirements: roommate(s), scarce eating out, very little driving, no treats, cooking from scratch, crappy health insurance…well, you get the idea!

    (And so it turns out that grad school is useful for something other than writing like an academic :)

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Hi, my name's Michelle Goodman and I've been freelancing since 1992. I'm author of My So-Called Freelance Life and The Anti 9-to-5 Guide. Read my full bio here.

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