Most freelance writers aim for a target hourly rate to hit their financial and career goals, using that rate as a basis for the work they charge. For example, a writer might expect to produce one article per hour and charge $40 per article in order to make an average rate of $40 per hour. Given the salary they used to receive, this may be more or less than they were hoping for.
This is a simplified example, but it can be applied to most types of freelance work. The biggest problem with this straightforward approach is that it might give you a false sense of security about your hourly rate, or worse, cause you to calculate a rate that’s far too low to reach your goals.
So how can you figure out what you’re really making per hour?
Let’s talk freelance rates…
Factors That Can Compromise Your Calculations
First, you’ll need to challenge your assumptions and move forward with the understanding that there are blind spots in your existing calculations for your freelance rates. Several factors can interfere with your time and cost calculations including:
- Inaccurate timekeeping. First, you may be engaging in inaccurate timekeeping, either by underestimating the amount of time your work will take (often influenced by optimism bias) or by miscounting the time you actually spend on the task. For example, let’s say you estimate it takes you an hour to write an article. It might take you two hours in reality, or it might take you an hour—but only after 20 minutes of preliminary research to get yourself ready.
- Payment variables. You may also need to incorporate some flexibility based on how and when you receive payments. For example, if you have even one client who won’t pay you (or pay you on time), it could interfere with your entire high-level calculation.
- Administrative hours. Billable time is the core time you spend on tasks and projects with definitive value for your clients, but don’t forget about the other hours you spend. For example, how long does it take you to finalize your invoices at the end of the billing period? How much time do you spend organizing your work? Admin hours can add up, and since they aren’t associated with an hourly rate, they can interfere with your estimations.
- Meeting and research hours. Similarly, you may neglect to consider hours for meetings and research. These are important steps for most freelancer writers; otherwise, you won’t have a topic to write about. You don’t necessarily have to charge for meeting hours or for research, but you should consider them when trying to calculate a fair rate.
- Gig hunting. Finally, consider the time you spend looking for new gigs, attracting new clients, and otherwise keeping your marketing campaign strong. This can take hours of work every week, yet it’s not associated with income; therefore, it can drag down your hourly rate average.
How to Compensate
Now let’s look at some ways you can compensate for these factors:
- Track your time closely. Use ClickTime or a similar time tracking platform to keep track of the hours you spend throughout the day. You may be surprised to learn how much time some tasks take up, and call your attention to important work that you aren’t being compensated for. While you’re at it, you may learn how and why you’re wasting time due to inefficiencies or distractions.
- Incorporate admin and “extra” hours into your calculations. You have a few choices here. If you feel your clients will accept it, you can start charging them for peripheral hours, such as hours for meeting time. Otherwise, you can estimate the price of a project based on your desired hourly rate and all your expected hours—including those not spent directly working on the project.
- Add a buffer. Finally, if you’re looking for a simpler solution, you can add a buffer to all your projects. Instead of charging $40 per article, you can charge $55, and assume the extra $15 will be enough to cover the extra hours you’ll spend doing admin work and handling other responsibilities.
With these strategies in place, you’ll be able to charge a more realistic rate for your work, and ideally, get closer to achieving your goal hourly rate. Even in the worst-case scenario, you’ll gain a better understanding of the relationship between the time you spend and the money you earn, which can help you improve as a professional.