One of the biggest challenges when you start freelancing is setting your rates. Several questions then arise:
- What income can I claim?
- What are the criteria to take into account to calculate my hourly rate?
- Can I modify this rate according to the missions entrusted to me?
Let’s take a look together at the hourly remuneration of freelancers and its method of calculation.
Hourly rate vs. daily tax
Freelancers have two different methods for invoicing their services:
- the hourly rate : It allows to calculate a tariff according to the number of hours necessary to carry out the mission.
- the daily tax : It defines your price per day. We do not count our work in numbers of hours, but in days: a much vaguer concept, since a working day can last 7 hours or it can last much longer.
So, in which cases should you choose one or the other? This depends first on the nature and circumstances of the mission. For example, if a client offers you a mission of 2 days a week during which you must work in their offices, the daily rate is probably more convenient.
Your way of working also comes into play: some freelancers are set like clockwork and know how to accurately estimate the time it will take them to complete a mission, others have a seesaw productivity and need deadlines a little more flexible.
In general, if your activity consists of chaining one after the other large projects to which you devote 100% of your time, the daily rate is probably the most suitable for you.
The hourly rate, useful for one-off services
Conversely, if you offer services of one or two hours, an hourly rate will be more sensible – even if you carry out several missions during the week, or even the day.
You will then need to assess as precisely as possible the number of hours required for each service to determine the cost.
An example :
If you are a web editor and you know that an article of 500 words generally takes 1h30, you will have to apply a price to the service which is equivalent to this number of hours worked. If you usually charge €40/hour, the rate for a 500-word article will be around €60.
The calculation of the hourly rate
To calculate your hourly rate, start from the monthly net salary that you would like to receive. Add the amount necessary to cover your social charges and taxes, 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 detail of these 4 steps to properly calculate your hourly rate.
Step 1: Set the monthly salary you want to get
To set your hourly rate, you can start from the monthly net salary that you would like to receive. Be careful, however, not to have delusions of grandeur! Conversely, be careful not to underestimate yourself by aiming for a pittance.
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 such as ACCRE). Also be sure to include the CET (Territorial Economic Contribution) and income tax.
If you have another status (sole proprietorship, etc.), do not hesitate to double the desired remuneration, miscellaneous charges representing approximately 50% of the profit.
To not forget :
If you are having difficulty estimating your company’s social and tax charges, you can perform simulations on different tools. This will help you get a clearer idea of these expenses and thus better take them into account when setting your hourly rate. We have selected 3 load simulators for you:
Step 3: Include the costs inherent in your activity
Office rental, miscellaneous supplies, internet line, professional mobile plan, travel to the client, purchase of equipment… The operation of a self-employed business requires a certain number of expenses, although they vary greatly depending on your activity and your way of working (working from home is necessarily less expensive than renting an office).
Estimate the monthly costs you will have to pay and include them in your “gross salary”.
You need to consider ALL of the factors that will affect your price. If you forget operating costs or other charges, the end of the month may be difficult!
Contact up to 400 customers/month
Register on Codeur.com to be alerted when a client is looking for a service provider with your skills.
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, assume that you will be working approximately 22 days per month, 8 hours per day (although, again, this varies by individual and activity).
To not forget :
To take this factor into account, remove about 30% of your estimated work time. From 22 days, we go to 15.4 billed days per month.
Simulator to calculate your hourly rate:
Are you a freelancer? Codeur.com allows you toconnect with hundreds of customers : don’t wait any longer to create your profile.