Freelancer: Do You Know How to Charge for your Work?9 min read

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Time is a precious resource in many people’s lives, both personally and professionally. So, nothing better than managing and valuing every second of your work, right?

Read this article and find out how to calculate the value of your working hour.

 

How to calculate the value of your working hour?

It is very important to know how to calculate the amount received for each hour worked. But, do you know how to make this account?

It’s simple, just divide the number of hours you work in the month by the salary received. For example, an employee working 44 hours a week adds up to 220 hours at the end of the month. Therefore, to find out what the hourly rate is, in this case, you need to divide the 220 hours by the amount that the employee receives.

If the worker receives a salary of EUR 2,500 per month, the value of his hourly work is EUR 11.36.

What about the hourly rate of self-employed people?

Self-employed workers do not always have a fixed salary per month. Because of this, it can be more complex to calculate your working hours.

It is recommended to estimate your monthly earnings and the hours you dedicate to your activity. After performing this calculation, you must divide the earning amount by the number of hours worked to arrive at the hourly rate.

It is essential to create a routine in which you remember to write down the hours you dedicate to work, in addition to the cash inputs and what percentage will be used to pay expenses and which will be used to add to your salary.

 

8 tips to help you charge for your work

Knowing how to charge a fair price for your work depends on several factors. Values may vary according to the project, the complexity of the work, and even professional experience.

Check out the best tips for not making a mistake when charging for the service offered below.

1. Recognize your worth

Every professional needs to recognize their value and market experience. These factors are key to setting an hourly rate. For this, it is necessary to understand at what professional level you are. Typically, the market operates as follows:

• Junior: people with up to 5 years of experience;
• Full: between 6 and 9 years in the market;
• Senior: from 10 years of experience;
• Expert: 15 or more years in the market;

In addition, it is important to research information about how much the market pays for your role.

 

2. Research the competition

Always look at the competition, as it may not help to charge an amount x for a service if your competitor charges a value much lower or higher than the others.

Conduct market research with your consumers, family, friends, and even other professionals in the field.

Tip: If you’re a less experienced worker, charge less.

 

3. Trace a goal

Another important point is to be aware of how much you need as a source of income. Write the essential values to live with peace of mind and define your salary.

 

4. Understand key costs

To put a price on your service or product, you need to understand the fixed costs that are needed to do this work, such as the purchase of raw materials and inputs from third parties.

By knowing your cost price, you can plot the selling price of your product or service.

 

5. Know your expenses

In every job, it is necessary to consider the costs involved, such as water and energy bills, internet, rent, taxes, etc. However, it is not necessary to enter the sum of these costs into a single project.

Divide by month and be aware that these values are about your “company”.

 

6. Calculate the hourly rate

As previously taught, it is essential to calculate the value of your working hour. Only then will you know how to present your client with a final budget for the hours worked.

 

7. Add a profit margin

A company’s profit is what makes its growth possible. Therefore, you must add a profit margin to your budget, as this return will appear with each service performed.

After all, profit is the difference between the billing received with the provision of services and the execution costs. To perform this calculation, just follow the following formula: gross profit = total revenue – costs.

 

8. Make your budget flexible

Finally, understand that each job, project, or client has its particularities.

Have an average value for each service, but when asked about your price, try to understand your client’s expectations to make a fair budget for both sides.

You can even think of discounts depending on the type of work offered.

Speedy.io: like a bank, but better

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At Speedy.io you and your customers receive real-time notifications about debts and payments. So you don’t have to worry about charging late bills, Speedy does it for you!

Speedy.io payment account offers:

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