FREELANCE RATES
How to set a rate and stop working for food, t-shirts, or film
credits
DON’T PUT THE CART BEFORE THE HORSE
Before you can determine a rate, you have to know your annual
expenses.
Start with an assumption that you
can reasonably bill for 25 hours per week,
and that you’ll take 2 weeks of vacation per
year.
You can’t (and don’t want to) work 40+ hours per week on
video projects.
Net profit is after….
1. 30% taxes2. 15% overhead costs
So you need to be sure that your rate will provide enough income
to cover your expenses after 45% of it is gone.
To net the same level of take home pay as a salaried employee, a freelancer must bill at
double to triple the employee’s hourly
rate.
SO WHAT’S A FAIR RATE?
Look up the job you’re interested in at www.indeed.com/salary
SO WHAT’S A FAIR RATE?
Look up the job you’re interested in at www.indeed.com/salary
For our example, we’ll use Video Producer.
$51,000 per year
To find an EMPLOYEE’S hourly rate:
1. Divide the annual salary by 52 Ex: $51,000 ÷ 52 = $980.772. Divide this answer by 40
Ex: $980.77 ÷ 40 = $24.52
So an EMPLOYED, SALARIED video producer would be paid
$24.52 per hour.
$24.52 x 2.5 = $61.30 per hour
Half day (5 hours) = about $300Full day (10 hours) = about $500
$60 per hour may not pay the bills:
1. $60/hr x 25 hours a week = $1500
2. $1500 x 50 work weeks per year = $75,000
$60 per hour may not pay the bills:
1. $60/hr x 25 hours a week = $1500
2. $1500 x 50 work weeks per year = $75,000
3. 30% taxes plus 15% overhead = 45% deducted
$60 per hour may not pay the bills:
1. $60/hr x 25 hours a week = $1500
2. $1500 x 50 work weeks per year = $75,000
3. 30% taxes plus 15% overhead = 45% deducted
$75,000 x.45 = $33,750
$60 per hour may not pay the bills:
1. $60/hr x 25 hours a week = $1500
2. $1500 x 50 work weeks per year = $75,000
3. 30% taxes plus 15% overhead = 45% deducted
$75,000 x.45 = $33,750
$75,000 - $33,750 = $41,250Remember, your expenses were determined
to be $50,000 per year.
$75 per hour ($375 for half day, $650 for full day):
1. $75/hr x 25 hours a week = $1875
2. $1875 x 50 work weeks per year = $93,750
$75 per hour ($375 for half day, $650 for full day):
1. $75/hr x 25 hours a week = $1875
2. $1875 x 50 work weeks per year = $93,750
3. 30% taxes plus 15% overhead = 45% deducted
$93,750 x.45 = $42,187.50
$75 per hour ($375 for half day, $650 for full day):
1. $75/hr x 25 hours a week = $1875
2. $1875 x 50 work weeks per year = $93,750
3. 30% taxes plus 15% overhead = 45% deducted
$93,750 x.45 = $42,187.50
$93,750 - $42,187.50 = $51,562.50 net profit
Before you decide to be a freelancer:
1. Know your worth.
Before you decide to be a freelancer:
1. Know your worth.
2. Get rid of personal debt.
Before you decide to be a freelancer:
1. Know your worth.
2. Get rid of personal debt.
3. Look into finding a part-time W-2 job (or two) or way to bring in passive income or regular income
Before you decide to be a freelancer:
1. Know your worth.
2. Get rid of personal debt.
3. Look into finding a part-time W-2 job (or two) or way to bring in passive income or regular income
4. Know thyself.
Don’t hire people or greatly increase your expenses in
any way until you have mastered how to squeeze
the most out of your revenue potential while
working alone.