Innovative technologies and new ways of doing business have influenced the increase in the number of people working from home. The COVID-19 pandemic has further contributed to the rise in this number. Some people liked this way of working and would like to try becoming full-time freelancers. A freelance career requires many decisions: which niche to choose, how to find a job, how to gain regular clients, and more. One decision that must be made at the very beginning is how and how much to charge for your services.
This decision requires consideration of several factors:
– How much money do you need each month for your lifestyle,
– How much money do you want to earn more than your current earnings,
– How much do other freelancers charge for the same service you want to provide,
– What will be the costs associated with freelance work,
– How much of your time can you dedicate to freelance work, etc.
Fixed price or hourly rate
Most freelancers charge for their services in one (or both) of two ways: a fixed price or an hourly rate. A fixed price is generally a price per project or a gig price (price for a predefined service). In both cases, you know how much time and effort you will need to complete the project or the ordered gig so that you can calculate the price. When you determine the price per hour, you do not know what kind of project you will be hired for or how long it will last, so this decision is not simple.
To help freelancers make this decision, Payoneer created a freelance hourly rate calculator. Freelancers are asked to fill in certain fields to get the recommended price. The final price may not be the one you will use, but this can be a handy tool for those just starting a freelance career.
Freelance hourly rate calculator
When you start the calculator, it is necessary to enter the desired currency, the amount of current annual earnings after deduction of expenses, and what percentage you would want to increase your earnings.
In the next step, you need to decide how many total billing hours you will have during the year. You need to fill in the following information: how many weeks during the year you will work, how many days during the week, and how many hours during the day. The time when you are not working will be deducted from that number of hours: during public and religious holidays, vacations, or when you are ill. All this is approximate data because no one can say with certainty exactly how much they will work, how much time they will spend on vacation, and whether and how much they will be sick.
Annual operating costs are the next step. You need to fill in the fields about your marketing, bookkeeping, office rental, and transportation costs to work. Enter slightly higher amounts than expected because there are always unforeseen costs.
In the fourth step, you fill in the data on additional costs: equipment (computer, furniture), insurance (health, life insurance), communications (telephone, internet), and subscription (software, internet services). As in the previous step, enter slightly higher amounts due to unforeseen costs.
It is necessary to enter your personal data and information about whether you have international clients in the last step. If you have international clients, you will be offered to choose the amount of your current freelance monthly income (less than $ 5,000, $ 5,000 – $ 9,999, $ 10,000 – $ 19,999, etc.).
Conclusion
Although this method does not cover all the relevant factors, it can help beginners to make an easier decision about how much to charge for their services per hour. Therefore, this calculator should not be understood as a definitive recommendation but as an aid in the decision making process. Creating the final price will make the process easier for many.
