Having established that you don’t want to write for free, you need to figure out what you should charge (or accept, if you are not in the fairly privileged position of setting a rate).
I highly recommend Anthony Caruana’s posts on his blog Totally Freelance, particularly these three:
There are really three ways of looking at setting a rate:
- What you need to earn
- What you want to earn
- What everyone else is getting
It very much depends on what kind of person you are as to which method you’ll find more appealing.
This is easy if your life is fairly stable and you’re thinking of switching from an existing job to freelancing, or you have a part-time job you want to supplement with side work.
Tally up all your expenses (and I mean all your expenses, from rent/mortgage repayments and food and bills to discretionary shopping, travel and entertainment) from the last year. Add the tax that you paid. This is your base figure.
Now, add the amount on top of that that you would like to earn in the coming year; say last year you went to Queensland for your holiday (nothing wrong with Queensland… don’t snigger) but this year you want to go to Iceland. That’s eleventy-bajillion dollars more (trust me, Iceland is expensive, and that’s coming from someone who lives in Sydney).
Base figure + eleventy-bajillion = cost plus figure
Divide your cost plus figure by the number of hours you think you’ll be working this year (don’t forget to give yourself a few sick leave days and holidays!). Boom! There’s your hourly rate. Adjust for word rate if required.
Because this method is based on expenses, you can make gains or losses by shifts in your spending, whether involuntary (‘oh yay, a new tax’) or voluntary (‘I’m going to buy fewer Faberge eggs this year’). If you were pretty spendthrift last year but this year you’re planning an austerity budget, your cost plus figure might actually be a little inflated. But that’s okay, it’s a guide.
Pro: Gives you a hard minimum and a solid incentive to earn money.
Con: Dependent on spending habits/discipline.
This is basically you saying ‘I want to earn a six-figure salary’ and then crunching the numbers until you get an hourly rate. Say you want to earn $100,000 and you plan to work 200 days per year. This means your target day rate is $500 and your target hourly rate is $62.50 (based on an 8-hour day).
Don’t forget that tax comes out of this and remember to account for the fact that there will be some hours of work where you won’t earn any money (doing admin etc).
Pro: Great if you’re an ambitious, goal-setting kind of person.
Con: May not be realistic.
Organisations such as the Media Entertainment & Arts Alliance and the Australian Society of Authors have a rate sheet you can use as a guide, though you need to check if the rates they propose work for you.
Information provided to writers’ resources like Rachel’s List, the Emerging Writers’ Festival and this anonymous Tumblr can also give you an idea of what other people are being paid and you can set your rate accordingly and/or slam your head into your hands and cry for all those starving writers.
Pro: Allows you to set a rate aligned with the market.
Con: Market could be (is) totally screwed and you won’t be able to pay your bills.
And another thing…
Some of the variables you might want to consider are:
- Experience: Those new to writing (or new to a subject) may feel more comfortable asking for a lower rate to cover possible deficiencies in their knowledge/experience. Conversely, those who are highly experienced may simply be quicker at writing on a particular topic and therefore need a higher rate to compensate.
- Expense of time: A fraction of your earnings should also cover your ancillary costs (administration, pitching, liaison, invoicing, chasing up invoices etc). Being more efficient at this is obviously good, but you can also add a little to your rate to compensate.
- Time cost of money: Money that you have now is worth more than money you’ll get later. Remember this if you have a few slow payers on your books (for example. a quarterly magazine that pays 30 days after publication but requires copy 30 days before publication). Assess whether the wait is worth the rate.
- Easy/painful client or topic: Ah, where would we be without pain pay? If it’s a topic you can cover but you find boring, perhaps push for a little more to make up for the unchallenging work. On the flipside, you might find a client who is a dream to work with, briefs well and pays on time and you may want to reward them.
What do you use to calculate your ideal rate?
1: Should I write for free?
2: What should I charge? [You are here]