Are you a freelancer? Great! Do you charge an appropriate hourly rate from your clients? If not, then don’t worry. You are not the only one. As a freelancer, you have to worry about a lot of things such as handling multiple projects, promoting your brand etc. In such a case, it is easy to charge low prices for your freelancing services.
But this is not right, isn’t it? Why do you want to charge low prices when you can easily get a higher price for your freelancing services. You left your full-time job and a stable income to become a freelancer to earn a lot of money but all your effort will go to waste if you are not able to charge a proper hourly rate from your clients.
According to a study, 30% of freelancers charge low prices for their services. But who is to blame for such stupidity? Of Course, the freelancers themselves.
You as a freelancer need to be aware of the ideal rates to charge from their clients. But how can you do that? That’s a really nice question and there is a simple answer for the same.In this article, I am going to give you certain tips on how to charge proper hourly rates from your clients.
Tips on how to charge proper hourly rates from your clients
Determine your target monthly salary
What is the first thing that you look for in a job after selecting the job description? Your monthly salary, isn’t it? So, why it should be different for a freelancer? You as a freelancer need to target on how much income you need to earn in each month. Accordingly, you take projects and charge appropriate rates for the same. For example, your full-time monthly salary is Rs. 15K. The number of working hours are 9 and 6 days a week working. Your per day salary is Rs. 500. Your per hour salary is Rs. 56. Similarly, you as a freelancer need to assess your hourly rates and accordingly your monthly salary as well.
Overhead and other expenses
Working as a full-time employee offers many benefits. One of them is that your employer covers your overhead costs and other expenses but when you are working as a freelancer, you are bound to pay taxes and overhead costs by yourself. You should consider these costs while you assess your hourly rate.
Business expenses
One of the major drawbacks of being a freelancer is that you yourself have to pay for various business expenses such as internet, office space, laptop etc. Such expenses can easily lead to a higher cost. You need to consider such expenses while you assess your hourly rate.
Health expenses
Why does a person earn money? To survive, isn’t it? We all know that the cost of medical expenses has skyrocketed in the past few years. When you are working as a full-time employee, your employer covers your health expenses (at least MNCs do) but as a freelancer you yourself have to pay for your health expenses. You should consider this expense when you assess your hourly rate.
Let’s say your target salary is Rs. 80K a month and the cost of all the above-mentioned expenses is Rs. 30K a month. The total amount will be Rs. 1,10,000. This will be your estimated monthly salary. Now let’s calculate your monthly working hours.
Monthly working hours
There are 720 hours in a month of 30 days and 744 in a month of 31 days. If you can work for 14 hours a day (7 hours of sleep and 3 hours for other activities), your monthly working hours will be 420 (30*14) and 434 (31*14).
Above mentioned are all the costs that you should consider while calculating your hourly rate. Now, let’s calculate your hourly rate. There is a formula for the same.
Hourly rate= Estimated monthly salary/Number of working hours
| For a month of 30 days | For a month of 31 days |
|---|---|
| Hourly rate= 1,10,000/420 = Rs. 262 | Hourly rate= 1,10,000/434 = Rs. 253 |
Being a freelancer is not a curse. It actually takes a lot of guts to leave your full-time job to work as a self-employed person. So, do complete justice to your efforts by charging appropriate hourly rate for your services.