sobel 060513 presentation freelance rates

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.