When you work freelance, you generally have the luxury of setting your own hourly rate – if you bill hourly.
This is tricky for anyone starting out, because you don’t really know what you should be charging. Talking with your peers and employers helps a lot, but isn’t always enough. Particularly if you have a specific budget in mind.
FreelanceSwitch, a fast growing network of resources for freelancers, has created an hourly wage calculator that can help you decide what to charge your clients.
I tried it, and, as fickle as my budget can get, it was very accurate.
For whatever field you work in, try this out, and see if you may be charging too little to suit your lifestyle.
Hourly Rate Calculator - [FreelanceSwitch]
I think an hourly rate calculator is a bad idea, mainly because it starts off with a deep assumption that completely limits what you can charge. Check out “Value-based fees”, the book by Alan Weiss. It turns the table by first talking with the client about the value you provide, deferring talk of fees until later; and you charge fees that are *much* higher than a simple (limiting) $/hr…
More at “Books, value, fees, and major changes in perspective”: http://ideamatt.blogspot.com/2006/11/books-value-fees-and-major-changes-in.html
It’s actually quite common for small businesses and frelancers to use a cost-plus approach to setting rates. But common doesn’t mean correct.
Your clients don’t care what your costs are. They’re going to evaluate your fees based on “value” to them and on what your competition charges.
And, I’ll second what Matt said. When you set rates this way, you stand a good chance of leaving money on the table.
To promote this calculator as being “very accurate” is a huge disservice to the inexperienced who might actually use the thing. At first glance, this calculator might seem to be of value but if you follow its instructions and use the results, I promise: you WILL be in for a very rude awakening come tax time. Why? All of the personal expenditures are based on AFTER TAX costs and no allowances have been made (anywhere within the calculator) for federal and state income and self-employment taxes. Apparently, the author’s “fickle budget” never heard of Uncle Sam…
I agree with all the sentiment posted here. Hourly fees are amateurish, unethical, based on inputs and not outputs and the quickest way to have yourself labeled a commodity.
Another, more robust, freelance hourly rate calculator can be found at Modern Freelance – http://www.modernfreelance.com/freelance-calculator/