Mjob Admin November 4, 2019 No Comments
To calculate a fair hourly rate for any kind of freelancing or professional job is one of the most puzzling part of freelancing, yet it is the most important part. Luckily, there is a formula with all kinds of parameters to give freelancers a base.
Freelancer Hourly Pay Calculator
Please check the minimum hourly wage
in your country, then go on:
The factors in this formula come from the Dutch Freelance Guide with variables edited by us, it is simple yet realistic, to give you a good reference on how much to offer your service. A lot of people calculate their rate based upon what they need to make to get by, not based upon what their services are really worth, and this could lead to lower than market rate offers.
The formula includes 6 factors (M, E1, E2, A, S and B), which will be explained below. The example mentioned here is in euros currency, but it shall translate fairly well to US dollars:
Freelance Fee Formula:
Hourly rate (before taxes) = Minimum Wage * Education * Experience * Authority * Specialism
- Factor E1 (Education) Highschool: 1.6 College/pre-graduate (Bachelor degree): 1.9 Post graduate (Master degree): 3.2 PhD: 3.6
- Factor E2 (Experience) None: 1 1-2 years: 1.1 2-5 years: 1.5 5-15 years: 1.8
- Factor A (Authority) None: 1 Yes, but you do have competitors: 1.4 I’m the top 10% in my field: 1.8 Absolute authority: 2.2
- Factor S (Specialism) Not unique: 1 Fairly unique: 1.2 Unique: 1.5 Very unique: 2 Rare: 3 Factor M (Minimum wage): this is the legal minimum hourly wage for your age in your region or country.
Top 20 hourly wages in the world
It serves a reference, we will update the date from time to time. Please check out the minimum hourly wage in your country if possible!
|Rank||Country||Minimum hourly wages (USD)|
- The last Factor B (Billable hours)
- This is your total working time minus the time you spend on administration, travel, meeting, coffee drinking etc. The fewer billable hours per week, the more you have to earn in the hours that are billable, so the higher your hourly rate should be. If you work alone, a percentage of 60% billable time is normal. Factor B is then 0.6.
The calculation: Total Rate = M x E1 x E2 x A x S * B
Example: Let’s say you have a college education, two years of working experience, and you are known from a column in a professional journal. The legal minimum hourly wage for your age is 9.99 euros in your country. You are billable 50 percent of the available time:
M = 9.99 E1 = 1.9 E2 = 1.1 A = 1.5 S = 1 B = 0.5 Rate = 9.99 x 1.9 x 1.1 x 1 x 1.5 / 0.5 = 62.64. You can, for example, round this hourly rate at € 62.50.
It is recommended that everyone recalculates their hourly rate annually, since everyone’s level of experience and authority will increase and perhaps also the specialism or education level. Furthermore, as the minimum wage increases, so should the freelance rate.