Re: Hourly Rates for Contract Writers

Subject: Re: Hourly Rates for Contract Writers
From: Robert Plamondon <robert -at- PLAMONDON -dot- COM>
Date: Mon, 24 Apr 1995 07:04:37 PDT

>I'm fairly new to freelancing, but this is what I did:

>I knew what I had been making as an employee, so I added about 25% (to cover
>the benefits I'd have to pay myself. The resulting $ value falls within the
>STC scale, even considering benefits and conversion to $CDN.

I hope you were overpaid as an employee, because this is a great way
to go broke. For example, suppose that, as an employee, you got
paid for a two-week vacation, two weeks of sick time, and ten paid
holidays. In other words, you get paid for 52 weeks, but only work
46 weeks. So a full working year is 40*46=1,840 hours in industry.
You get no free hours as a contractor. If you take the same number
of days off, it amounts to an 11.5% pay cut. So half of your markup
goes out the window instantly.

The time spent lining up additional jobs (which can be extremely time-
consuming) is, of course, not billed to anyone. Any provision for
this further reduces the number of hours available to you during the
year for actual billable hours.

And, of course, if you aren't perfectly successful with your marketing
activities, you'll have dead time in addition to what you set aside
for marketing. You can't bill hours if you don't have a client.

In the U.S., you also get to pay an addition 7.65% of your income in
Social Security taxes if you're self-employed.

Finally, you may have actual expenses -- computers, software, office
equipment, postage, letterhead, phone bills, travel expenses, memberships,
magazines, books. These add up fast.

1,500 hours is considered a pretty full year by many consultants; 1,000
hours represents an okay year for many. Which exlains why freelancers
tend to charge double what they'd get as an employee -- they can't bill
as many hours, and they pay their own expenses.

-- Robert
Robert Plamondon * Writer * robert -at- plamondon -dot- com * (408) 321-8771
4271 North First Street, #106 * San Jose * California * 95134-1215
"Writing is like plumbing -- even people who know how to do it will
pay top dollar to keep their hands clean."

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