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Hourly Rate - Daily Rate / Monthly Rate - Freelance

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Hey Guys.

 

Just a quick question on how you would answer this. I've just relocated to Australia and I keep getting asked what my rates are in this format. It may be a standard freelance format but I am new to it.

 

I am not asking how much I should charge I am asking what format I put it in.

 

So say for Example I charge $50ph so for a 8 hour day I would get paid $400 per day... so if I multiple that by say 20 days in a given month I get $8000.

 

This is just an example. I don't make 8k a month, but I am open to offers ;)

 

Cheers

Liam

 

 

 

 

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Start viewing the day rate as your new standard. Also figure your day to be 10 hours at the minimum, not 8.

 

If being asked day vs month rates, its likely because they are looking for a break on a month commitment. How much to discount there is on you.

Edited by AromaKat

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Off-topic, but sort of related. Where the fuck does this '10 hour day' come from? I believe I've asked this before.

I'm curious as to where the origin of a freelancer day is 10 hours. Does this apply in other areas of freelance? i.e. business, accounting, construction, etc.

Also does this 10 hour rule apply in other countries?

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Off-topic, but sort of related. Where the fuck does this '10 hour day' come from? I believe I've asked this before.

I'm curious as to where the origin of a freelancer day is 10 hours. Does this apply in other areas of freelance? i.e. business, accounting, construction, etc.

Also does this 10 hour rule apply in other countries?

 

 

It's nonsense.

 

I suppose it comes from the shooting day length.. but 10 hours in front of a computer screen is for freelancers without the experience and confidence call BS and demand overtime.

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but 10 hours in front of a computer screen is for freelancers without the experience and confidence call BS and demand overtime.

 

Well, good luck with that. Overtime is an employee thing.

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Overtime truly is a hit or miss. Some studios do and some don't, I've found that it doesn't hurt to ask, but asking is key as studios will just assume no OT.

What sucks is that, as freelancers, there doesn't seem to be any kind of set standards.

Every studio i've freelanced at in NYC has told me they work 10 hour days.

Basic, seeing as you're from working in Australia now, is the 10 hour day a standard there?

Where were you before and what were the working hours there? Any other non-US located freelancers care to chime in?

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Yes, if you're freelance, typically your services will be rented by the day. Offering smaller increments of your time usually just means loss of income for you because it's unlikely you'll book 5 hours at one place and 5 at another in one day, so no one does it.

 

Overtime is an argument for being indispensible. Most days are not going to end right at 8 or 10 hours, because we're not factory workers producing widgets. Laws regarding freelancing may be different in Australia, but in the US it's your call whether you charge your employer overages for working beyond the agreed number of hours. In turn, it's your employer's call whether they want to keep having you in to do work. If someone else can do what you do just as well, and they don't demand overage charges, you might be out. But being indispensible, being uniquely capable, and providing some kind of value that others can't, well that puts you in a pretty good position for negotiation. If they can replace you the next day, you have no leverage. Don't be the replaceable drone and you'll be happier.

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If there is no concept of charging overtime then, there is no concept of an 8 hour day vs. a 10 hour day vs. a 16 hour day. Like Binky says if you are viewed as replacable and working on a flat day rate they are going to work you for as many hours as they can until you burn out for that flat fee.

 

Just sayin.

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Seems like this discussion is sort of a universal thing among all creative freelancers, based on my experiences elsewhere.

 

The "10 hour day" is likely something understood among freelancers when calculating a "day rate", not something that's discussed or negotiated with clients. IOW, we calculate day rates on our own, choosing how many hours to add in, what the actual costs and opportunity costs are. When we're done we have a number. When someone asks the rate (perhaps with a number of days already in mind), you tell them -- they multiply it out, look at their budget and say yes or no. And of course, how original and unique your work is (a.k.a "indispensable") plays into that yes or no... but that's a subjective thing, based on the opinion of the client. You can't really figure that into a rate unless you know for sure that no one else can do or knows how to do some in-demand task that you've already demonstrated.

 

Doesn't matter what field of work, I've never discussed with any client how I arrive at my day rate. The rate is the rate and they either accept it or they don't. There's no talk of hours or pricing of different kinds of work (example "yah but don't you charge less for doing an hour of X vs. an hour of Y?"). That's none of their business. They ask for a rate, give them a rate and wait for an answer. It's not their place to ask about "where the rate comes from", and not ethical quite honestly. They're a client, not your business school professor, evaluating a mock service or product.

 

They either feel it's fair or they don't and if they don't they can say thank you and move on. Nothing wrong with that. Everyone has their budgets and opinions. But that doesn't mean those hiring are entitled into insights about "the making of a day rate". If you usually work 10 hours, charge 10 hours as part of your rate, but there doesn't need to be any discussion of it.

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The best thing to do is be clear and upfront about your rates so there aren't any surprises or negotiations regarding price after the fact.

 

When I'm hired as a W9 employee:

my day rate = hourly rate x's 10, anything over ten hours a day is billed at a rate of 1.5 my hourly rate, my lunch break is also paid

 

When I'm hired as a W2 employee:

my day rate = hourly rate x's 8, anything over 8 hours a day is billed at a rate of 1.5 my hourly rate,my lunch is usually unpaid

 

I'm always very direct and often tell a new client, "Just so you know, I don't work for free." and they usually laugh and say "Of course not, why would you!" 90% the time it's not a problem, the other 10% of the time I lose what would have probably been a nightmare of a project anyways.

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i agree with what most here write. negotiate upfront. don't deal with cheap clients, they are more trouble than they are worth.

 

i had one client who at the end of the job tried to argue that because he bought pizza for everyone he doesn't want to pay me over time...

 

didn't work with them anymore...

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i agree with what most here write. negotiate upfront. don't deal with cheap clients, they are more trouble than they are worth.

 

i had one client who at the end of the job tried to argue that because he bought pizza for everyone he doesn't want to pay me over time...

 

didn't work with them anymore...

 

:blink:

 

It's amazing the crap people try to pull. And FWIW I hope no one mistook what I wrote as "don't negotiate", only that you don't negotiate the variables that comprise your Day Rate. You can negotiate any number of other things related to where you'll work, for how long, how the deliverables will be provided, copyright, non-disclosure, etc. But not the rate itself.

 

As for the "good food" trick, I had a part-time employer like that about 10 years ago. Getting taken to a modest lunch ($10) 2-3x a week, in his mind meant he shouldn't have to pay everyone a real salary or "I can't pay you as much this week as last week because _____". Fuck that; never done that since and never will again. That's the danger of working for a startup company as opposed to being contracted out by one where you have the terms in B&W, where you can negotiate to receive 50% of the fee up front, etc. I mean you do what you gotta do, but most of the time if you really look at it critically and all the cash flow in and out of your life, you don't gotta when it comes to cheap would-be clients.

 

IMO the "internet makes everything free" attitude has seeped into almost every kind of creative business, and as the current generation of 15-25 types get into positions of power over the next decade, it's going to get worse in all probability. They've been stealing music, software and everything else under the sun for years without thinking twice about it, and they'll try to steal work hours too because there are people out there who don't know their own worth think it's OK to work for free (insert typical spec movement rant here -- it amazes me anyone in this industry can defend that illogical BS with the typical "be more awesome" strawman, as if "level of awesome" has anything to do with the root cause of the problem).

 

As it is, Motion Designers routinely get the "work for peanuts because I'll give you exposure" racket, Photographers get the "wait... if I have to pay for you to shoot and enhance the pictures to my specifications, why should I have to pay for the prints too?", and on it goes. I expect it will only get worse so we need to collectively take a stand when these situations arise. I agree with the general sentiment that if someone tries to "barter" with you, tell them you're in business to make money, not experience life through the eyes of Lewis and Clark... that they should go find some high school kid to barter with. Maybe they can give him a used X-Box and some games and be paid in kind with barter quality work.

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I dunno, i find that most clients that try to cheap out and find someone cheaper, often enough come back with a half assed project that the other guy can't finish on time.

 

so for the most part its not a big deal to me. I understand that everyone is trying to do stuff cheaper, and im sure their clients in turn are demanding more for less.

 

But there are no industries where this doesn't happen. Even lawyers are getting squeezed on many levels, since people can just google stuff and defend themselves.

 

We just need more negotiating tutorials rather than shiny balls tutorials =)

 

Maybe i'll try come up with something... just need to figure out the right way to go about it.

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We just need more negotiating tutorials rather than shiny balls tutorials =)

 

This book is pretty good

 

http://www.amazon.com/Success-Design-Essential-Reference-Designers/dp/144031022X/ref=sr_1_3?ie=UTF8&qid=1392392886&sr=8-3&keywords=design+for+success

 

It's about running a successful design business, principles apply to freelancers as well as companies. I like it because it's not very in depth but gives you a bunch of easily digestible bite size bits of info you can use right away.

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That does look like a good one. Might get some extra ideas from it. Thanks for the tip.

 

Agree the genre of shiny sphere tutorials has a full library and that we could use more tips from seasoned pros (not tutorial pros) on how to approach day rates, negotiations, etc -- in specific situations. I think the general rule we're all generally (?) agreeing on here (set your rate and don't discuss the details of the rate) is on point, but specific examples that have worked or not for people, never hurt.

Edited by Zmotive

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Thought I would chime in as I have been on both sides of this arena, as a freelance and as a studio owner hiring freelancers. As a freelancer I have always found that rate is a hard thing to gauge and an even harder thing to set the original level. I guess something that helps is knowing the range of your market (or the market you may be working remotely in). If its a big market and you are near the top, you probably know what your rate is and won't even be reading this thread. If you are just starting out its tough... When I personally quit my last full time job I started to figure out based on a number of factors including: quality, speed, trouble shooting/technical ability, attention to detail, project lead ability, cost of living (ie what are my bills), and ability to work with others.

 

This may seem normal or strange, but those are all qualities I thought would impact my usefulness to a studio and therefore increase/decrease my rate. If you can make great work, but it takes you forever... or if you are super fast but really sloppy then your utility to a studio decreases.

 

As far as hours go it seems that everything I have seen in CO, CA and NYC are 10 hour days. Some people require less and others require more or even insane hours. Stipulating your over 10 hours rate is key for those clients. So is being reasonable on your end. If you work two 9 hour days for a client and then one 11, I personally think you are crazy to charge them for that. But... that also depends on the market where you are. i.e., how easily replaceable are you. Clients/Shops that require loooong hours you can always raise your rate or turn down the work to continue the relationship. Our industry is fast paced and deadline driven and as much as possible in my studio, I try to keep 9-5 hours for both freelancers and staff. There are times that this is just not possible though and personally would expect employees to stay and work if I am and freelancers to do the same and bring up the discussion of overtime hours if it is alot.

 

As far as practical testing, its really difficult and my best advice is to find a rate that works for you for some clients and slowly raise it as you gain new ones. You will find a spot that works for both of you.

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Everyone works in different circles, but in the little nook of the industry I exist, overtime requests are a very unwelcome surprise to clients. I don't jump around between cubicles across various big-name studios and for the most part I'm hired by people who don't know a thing about mograph, so perhaps my perspective is different than most here. I imagine in larger operations like that there are far more variables in play, and are likely not w9s anyway (shouldn't be). Not to pivot the conversation, but charging overtime on a w9 contract seems a bit against the law in terms of employee vs contractor classification. I think the whole overtime vs no overtime thing simply revolves around this. If w2, overtime is required by law. (sorry, non-US o.p. for complicating things with this US law lingo). I know that a lot of shops are illegally classifying, so much so that it seems the norm, but lets not get into all of that. My rule of thumb is w9 (day rate)... no overtime, period. w2, (hourly) overtime, period. Maybe I'm wrong, maybe not. I'm just doing things in the ways the particular lawyer and particular CPA I use told me to do them.

 

Point is, if they have you on w9 a flat rate of day or project is expected, and if invoices show "overtime" then it raises red flags about classification stuff. And its not just the classification concerns. If you quote 10 days to do something but it takes some crazy hours on the last couple of days for whatever reason, it can create problems when trying to ask for more than the original quote. Projects always heat up toward the end, and clients don't make any more money because something took longer than you initially told them to pass along in overtime. As long as you are upfront about how much potential revisions, etc you should be in the clear.

 

I have always found its best to just have your day rate reflect the worst case scenario, so producers / the client can bid out the job appropriately. And you can ask how long the days are, what the workflow of the project is looking like, etc if being introduced to a new client.

 

In the spirit of sharing specific ways of negotiating, the way I always bid out projects is by providing a gannt chart. I estimate it will take _X_ amount of time to complete task A. If it takes longer, I eat the cost / time. Another line item is in there with estimated revisions for task A which is completely variable. I add it in there to let them know that that time is on them. It could be less, it could be more, but it makes them aware to account for it. There are a few of these broken out in unique milestones for tasks B, C and so on, so I'm covered across all stages of the project. The client gets their flat number needed to proceed with awarding the job, and we get overage protection with revisions etc being their financial concern.

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Everyone works in different circles, but in the little nook of the industry I exist, overtime requests are a very unwelcome surprise to clients. [.....] My rule of thumb is w9 (day rate)... no overtime, period. w2, (hourly) overtime, period. Maybe I'm wrong, maybe not. I'm just doing things in the ways the particular lawyer and particular CPA I use told me to do them.

 

Point is, if they have you on w9 a flat rate of day or project is expected, and if invoices show "overtime" then it raises red flags about classification stuff. And its not just the classification concerns. If you quote 10 days to do something but it takes some crazy hours on the last couple of days for whatever reason, it can create problems when trying to ask for more than the original quote. Projects always heat up toward the end, and clients don't make any more money because something took longer than you initially told them to pass along in overtime. As long as you are upfront about how much potential revisions, etc you should be in the clear.

 

I have always found its best to just have your day rate reflect the worst case scenario, so producers / the client can bid out the job appropriately. And you can ask how long the days are, what the workflow of the project is looking like, etc if being introduced to a new client.

 

In the spirit of sharing specific ways of negotiating, the way I always bid out projects is by providing a gannt chart. I estimate it will take _X_ amount of time to complete task A. If it takes longer, I eat the cost / time. Another line item is in there with estimated revisions for task A which is completely variable. I add it in there to let them know that that time is on them. It could be less, it could be more, but it makes them aware to account for it. There are a few of these broken out in unique milestones for tasks B, C and so on, so I'm covered across all stages of the project. The client gets their flat number needed to proceed with awarding the job, and we get overage protection with revisions etc being their financial concern.

 

You make some good points and have a good idea there WRT to a gantt chart. FWIW I would not charge overtime to W9 clients either, but I would build the proper amount of hours and costs into it if I find I go over hours a lot. W-2, I'd charge overtime because it would be an hourly rate or I wouldn't agree to the job. That's any type of job (web design, 3D, whatever).

 

But I like the idea of the client having a visual depiction of what's going to happen and staple that into the contract and take as many of those potential excuses out of the equation at the end of the process. They know what you're going to charge and if you deliver, they have to pay it.

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When it comes to day rates, OT, and W9's vs W2's, the context of the job/relationship is pretty important. If you're being treated like an at will employee and your employer is telling you what time to show up to work and managing your day to day duties and telling you how to do your job, it's all about making sure you are compensated for your time. That's the only leverage you have. In that type of scenario you don't have the final say as to how things get done, you're at their beck and call so to speak. This is really a pure W2 scenario, but in reality lot's of shops, not as many as in the past however, have this setup as a W9 situation.

 

If I draw up a quote/estimate for a project and work from my home office, I'm acting as a true W9 sole proprietor/small business and I dictate how the job is done and take on that extra responsibility for managing my time and the unforeseen consequences that arise with every project. If I waste a bunch of time polishing a shot only to cut it from the edit later, or get lucky with some badass design quicker than I anticipated, I take the loss or the gain associated with my decision. I wouldn't charge OT in a scenario like this, but I'd boost up my estimate/quote ahead of time if it was a quick turn around and I anticipated some long nights in order to get things done on time.

 

I'd say 75% of my work falls into the at will employee type of scenario, I'm hoping I can change that in the near future to get more control over the work I do. I'm sure everyone feels, at least some of the time, that they could do it better if only someone in the middle would just get out of the way. It seems like the progression is staff > freelance > small business owner. I guess each step has its own set of new, mostly imagined, fears and self doubts to overcome...

 

Sorry if I'm getting off topic.

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I really think the best solution is just straight up pay everyone hourly for every hour they work. Forget the whole time and half thing unless maybe you get into crazy long stretches. I am talking about in house freelancers here.

 

In theory the whole some people work faster some work slower thing makes sense but I think in practice flat rates incentivize producers in the wrong way. For example it doesn't matter how fast I am as a freelancer, if I waste time sitting around waiting for someone up the pipeline to feed me assets or it takes me twice as long because I am on some crappy machine, or the network keeps going down do I really not get compensated for my time? I have had so many experiences as a freelancer where I am on a flat rate and can't do work because of X, Y, Z situation beyond my control and the cost of the extra hours for that get passed on to me.

 

If you are offsite and on your own equipment then I think flat rates make a lot more sense.

 

Anyhow I find compensating people straight up hourly for their work, works well for my studio. It incentivizes me to keep everything running smooth and efficient, it incentivizes freelancers to work those extra hours cheerfully because they know they are getting extra money in their pocket for that time, and they still try and get things done as quickly as possible because they want to be perceived as good value for the money to get called back.

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I really think the best solution is just straight up pay everyone hourly for every hour they work. Forget the whole time and half thing unless maybe you get into crazy long stretches. I am talking about in house freelancers here.

 

In theory the whole some people work faster some work slower thing makes sense but I think in practice flat rates incentivize producers in the wrong way. For example it doesn't matter how fast I am as a freelancer, if I waste time sitting around waiting for someone up the pipeline to feed me assets or it takes me twice as long because I am on some crappy machine, or the network keeps going down do I really not get compensated for my time? I have had so many experiences as a freelancer where I am on a flat rate and can't do work because of X, Y, Z situation beyond my control and the cost of the extra hours for that get passed on to me.

 

If you are offsite and on your own equipment then I think flat rates make a lot more sense.

 

Anyhow I find compensating people straight up hourly for their work, works well for my studio. It incentivizes me to keep everything running smooth and efficient, it incentivizes freelancers to work those extra hours cheerfully because they know they are getting extra money in their pocket for that time, and they still try and get things done as quickly as possible because they want to be perceived as good value for the money to get called back.

 

+1

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How many hours of these standard 10 hour days are actually spent working, and how many are breaks? 10 hours including an hour and a half for coffee and lunch whilst checking twitter is kind of different to 10 hours concentration with another hour on top for lunch.

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If someone here is saying they're putting in 10 hours of work, I'll take them at their word that it's a 9am to 8pm type workday, including an hour for lunch. If someone gets up and takes a 5-7 minute water / coffee break two or three times a day to hydrate, rest their eyes (and bladder), I hardly think that should be deducted from the 10 hours. An hour for lunch yes, everything else, no. It comes with the territory and being human (not a machine).

 

In fact, not taking periodic short breaks has been scientifically proven to be a dumb move, no matter what your line of work is. Your brain needs occasional diversions and rest (as do your eyes) to be at their full capacity all day long. In fact the Japanese have known this for decades, but in our ass-backward western work culture, we haven't figured it out yet. The Japanese have notoriously intense work ethic, work long hours, and pride in their work... yet many of them will actually nap for 20 minutes in the middle of every work day, to refresh their mind, eyes and performance. As a result they're much more focused and efficient the rest of the day. Again scientifically proven. The mind cannot focus properly for 10 hours straight.

 

Here in the US we take a different approach, opting often to hit the wall instead, with our carb comas from lunch and then pop 5 hour energies at 2pm (to counter-act the crap food we eat at lunch) like its not going to cause kidney failure one day (seriously, concentrated energy drinks are terrible for your system... give it a few more years and wait for the health problems to start crawling out of the woodwork and end up on 60 minutes with some energy drink exec going "I don't know what you're talking about".) :ph34r:

 

I tried them for about a year and gave them up cold because I always felt like crap after the initial rush, and they did nothing to help me truly focus. Anyway, end rant... just saying, a few short rests here and there will mean better quality work at the end of 10 hours (fewer mistakes, etc) so there is zero reason to deduct that type of stuff from a day rate. Anyone who charges for long lunch breaks however, is off the mark IMO. If you're W2 and they say "we pay your lunch", then fine, but shouldn't be included otherwise.

Edited by Zmotive

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pomodoro technique anyone?

 

i get soo much more done with 25 min work - 5 min break.

 

if i just work straight i burn out after the 3rd or 4th hour and my productivity falls to like 20% of what it is with breaks.

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