One of the greatest difficulties when you launch freelance is to fix your prices. Several questions then arise:
- What income can I claim?
- What are the criteria to take into account to calculate my freelance hourly rate?
- Can I change this rate according to the missions entrusted to me?
Let us take the point on the hourly remuneration of freelancers and its calculation method.
Freelance hourly rate vs. daily rate
THE freelancers are cheaper than agencies. This is often the first argument brought to highlight the work of freelancers in relation to agencies. But it is important to calculate your hourly or daily rate to be profitable.
Freelancers have two different methods to charge their services:
- THE time rate of a freelance: it makes it possible to calculate a price according to the number of hours necessary for the realization of the mission.
- THE daily rate of a freelance: it defines your price per day. We do not count her work in numbers of hours, but in days: a much more vague concept, as that a working day can last 7 hours as she can last much more.
So, in which cases to choose one or the other in your billing tool ? It depends first on the nature and circumstances of the mission. For example, if a customer offers a mission of 2 days a week during which you have to work in his offices, the daily package is probably more convenient.
Your way of working is also taken into account: some freelancers are settled as clocks and know how to specifically estimate the time they need to accomplish a mission, others have a Saw teeth productivity And need a little more flexible time.
In general, if your activity consists in chaining one after the other of large projects to which you devote 100 % of your time, the daily rate is probably the most suitable for you.
Read too :: Freelancers, how to choose between self-employed status and portage status?
The freelance hourly rate, useful for occasional services
Conversely, if you offer services for one or two hours, an hourly rate will be more judicious – even if you carry out several missions during the week, even the day.
You will then have to assess as precisely as possible the number of hours necessary for each service to determine the cost.
If you are a web editor and you know that a 500 -words item generally takes 1:30, you will have to apply a price to the service that is equivalent to this number of hours worked. If you usually charge 40 € / hour, the price of an item of 500 words will be around € 60.
Calculation of the freelance hourly rate
To calculate your hourly rate, start from net salary monthly that you would like to perceive. Add the amount necessary to cover your social and tax charges, as well as your activity costs. Then divide this amount by the number of hours worked in a month, and you get your hourly rate.
Here is the details of these 4 steps to calculate your hourly rate.
Step 1: Define the monthly salary you want
To fix your hourly rate, you can leave the net salary monthly that you would like to perceive. However, be careful not to have the madness of quantities! Conversely, be sure not to underestimate yourself by aiming for a wages of misery.
Find out about the scale of your sector of activity, for have an idea of the remuneration you can claim. Take into consideration your level of study and experience in order to review this remuneration upwards or slightly downwards, depending on your case.
Read also: Entrepreneurs: What salary should you pay yourself?
Step 2: Add your social and tax charges
If you are self-employed, you will need to add around 30 % to your ideal net salary to cover your social and tax charges (unless you benefit from exemptions thanks to financial aid as accre). Also be sure to integrate the CET (territorial economic contribution) and theincome tax.
If you have another status (sole proprietorship, etc.), do not hesitate to double the desired remuneration, Various charges representing around 50% of the profit.
You will surely take a few days of rest during your year (it is important to disconnect !). As the paid leave system does not exist for freelancers, it's up to you to create your vacation capital by adding a small percentage to your remuneration.
If you encounter difficulties in estimating the social and tax charges of your business, you can perform simulations on different tools. This will help you get a more precise idea of these expenses and thus better take them into account when setting your hourly rate. We have selected for you 3 load simulators:
Read also: How to choose your wage portage company?
Step 3: Include the costs inherent in your activity
Office rental, various supplies, internet line, professional mobile package, displacement At the customer, purchase of equipment … The operation of a self-business requires a certain number of expenses, although they are very variable according to your activity and your working method (work at home is necessarily less expensive than renting an office).
Estimate the monthly costs that you will have to assume and integrate them into your “gross salary”.
Please note: you must consider all the factors that will weigh on your price. If you forget operating costs or other charges, end of the month may be difficult!
Step 4: Calculate your hourly rate
Now that you have obtained a monthly sum, all you have to do is calculate your hourly rate.
For this calculation, start from the principle that you will work around 22 days a month, 8 hours a day (although, once again, it varies from one individual and from one activity to another).
Remember, however, that every hour worked as part of your activity will not be invoiced. Understand by this that your hourly rate will not be applicable to the time devoted to the prospectingto the management of your communication, to the administrative or even to accounting.
To take this factor into account, remove around 30 % of your estimated working time. From 22 days, we spend 15.4 days billed per month.
Take a concrete example: you are in an individual business and you want to perceive, each month, around € 2,500 in remuneration. Here is the calculation to be performed:
- To compensate for charges: € 2,500 x 2 = € 5,000
- To provide vacation: 5,000 + 10% = € 5,500
- Indispensable costs for activity (around € 300 / month): 5,500 + 300 = € 5,800
- Calculation of the daily rate: 5,800 / 15.4 = € 376 / day
- Calculation of the hourly rate 376/8 = 47 € / hour
Simulator for Calculate your freelance hourly rate
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