Be your own boss, set your own schedule, and decide how much you’ll be paid. To most, this sounds like a fantasy. But for freelancers, entrepreneurs, and contract workers, that fantasy can become a reality. However, like all dreams-come-true, reality is a bit more complicated.
One of the primary challenges of the gig economy is figuring how much you should charge for your services. Some clients offer jobs at a set rate, but many ask for your rates. If you haven’t yet set your rates, this can lead to some panicked number-crunching and a premature answer.
Setting rates is a delicate but necessary task. When done right, though, proper rates will keep you fairly compensated, without pushing away clients.
So, how can you set a fair hourly rate? And is that the only way you can charge and get paid for your work? Here’s everything you need to know.
Three Ways to Calculate Your Hourly Rate
At most conventional jobs, you get paid per hours worked. Your hourly rate takes that concept and translates it into the freelance world.
However, that process is not without its complications. At a traditional job, you typically work eight hours per day and are paid for each one, regardless of how much work you do every hour. But as a freelancer, you’re expected to charge only for the hours you spend working on a specific project.
Because you’re doing more focused work for those hours, your freelance hourly rate might be higher than what you would get paid at a regular job. However, you want to make sure it’s not too high for your client pool.
There are a few ways to calculate what you should charge per hour; here’s how each one works.
Work Backward From Your Goal
One way to calculate your hourly rate is to set a target salary, and then work backward to determine how much you need to make each hour.
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Source : How to Calculate Your Hourly Rate (and Why You Might Not Want One)
