How Much to Charge for Side Work?
Posted on March 30, 2008
Calculating what to charge for freelance work on the side is a question I wrestled with for a good while. Search the internet and you’ll come up with everything from vague answers to complicated formulas. What I’ve landed on is a simple formula: Take your yearly salary working full-time and drop-off the last three zeros. That means if you are just starting out in web design or development and making $35,000 let’s say, then you you’d charge $35 or possibly $40 per hour. As your income goes up, so does your hourly rate. This rate assumes a yearly compensation in the private sector. If you work in government or higher education you may need to boost this rate in congruence with the market. As you become more accomplished in your work you may also pad the number in kind.
A Worker is Worth His Wages
As you move-up in your career you will find fewer customers that will pay $75 to $100 per hour for web development or design. Those customers however will be very serious and the compensation will be worth your while. As your salary continues to rise your need for side work will continue to diminish and your hourly rate will actually prove to be a protection for your time.
This formula assumes you are picking-up side work in addition to full-time employment. I would not use this pricing structure to launch a business. Running a business full-time will entail much more overhead.
It’s All or Nothing Baby
A year ago I devoted a good deal of time launching a site for our start-up church CedarRidge. I told our pastor that he couldn’t pay me for the work in any form. I’ve made the decision to never do discounted work. There are three distinct categories in my mind:
- Pro Bono - This type of work is only done for causes in which I have a high degree of vested interest and only on a limited scale.
- Limited Free Consulting - My line in the sand is when my hand touches the keyboard to configure, design or implement any changes for a friend or acquaintance. I’m always happy to engage in conversation even for a couple of hours to help someone out. That is one of the motivators for this blog. I find it stimulating and enjoy the process. Two or three hours is about my limit in this category. If the person needs more time than that, they will need to start compensation at my going rate.
- Full compensation - If someone is ready to pay my hourly rate in my field for their site, then they are very serious about the project. I don’t by-the-way charge or engage in related work such as system administration. Though I’ve worked as a system admin, I’m not up-to-speed to the degree that I would charge someone and not interested in working in that area. I’m happy to lend a hand on occasion to a neighbor in which I classify that as free consulting.
The “going rate” for web design or development is all over the map. In no way would I want to take advantage of a customer but in the same vein, if I am going to spend night and weekend hours, I want to be compensated well for that effort. If you, like me work professionally in any given area you will become an expert in your field. That knowledge has value that should receive compensation. Don’t sell yourself short.
What’s your experience with side work and compensation? How have you figured what you would charge?
Filed Under Productivity, web design |
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2 Responses to “How Much to Charge for Side Work?”
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Hi Phil, what about projects that get deep into 4 figures?
I have a break point of £4k where I then break the project into phases — which typically follow the milestones you’ve set out for your client.
That way, the client pays at each stage and not in one lump right at the end.
This also lessens the impact of non-payment, should a client see fit not to pay at some stage…
Yes that is an excellent point for large projects. I have also read someone bidding by amount rather than hourly. I’m all in favor of it as well. I’ve done payments in thirds: Third up front, third in the middle and third at the end.