Your Rate - A better way to calculate your hourly freelance rate | Hacker News Reader

Your Rate - A better way to calculate your hourly freelance rate

yourrate.co

35 pointsudp48 comments

Just a small note - While the site's design is simply elegant, the User-Experience needs to be re-considered. The text boxes give the wrong impression - I found myself trying to enter the amount into the label field that says "Money per month". Other than that,everything else is perfect! This is the best example of a simple idea solving a complex problem. Keep it up guys!

Thanks, this should be fixed now. When you click on one of the labels it focusses on the corresponding input field.

I found myself doing the same thing. I find "labels on the left" to be a more natural pattern.

Agreed. I found myself doing that too :)

+1, probably just changing the text colour (it looks like standard placeholder text) or making the box colour a bit more opaque would do the trick.

While I appreciate the simplicity, design and speed of the site, the caveat at the end "Make sure the rate matches your value proposition. Charge what you're worth, but be reasonable." is the whole crux of pricing problems, and the site doesn't really help me figure out "what I'm worth" (also in the header text too).

If I'm a basic HTML developer with simple Dreamweaver skills from 1999, living in a major metro area, what I'm "worth" might really be something like $10-12/hour (in the US). The skills you have that are in demand dictate 'worth' in the market. And really, it's how an employer can translate those skills in to value in their marketplace that dictates the worth to them. If they're paying $5000 for website feature X, they reasonably assume they will get far more value than $5000 over a reasonable time frame (month? 6 months? 1 year?)

Being able to determine the value your skills brings to an employer is difficult, because it's not just your skills - you're reliant on them to be able to translate your labor in to money and they may suck at it. I've hired super talented people that I subsequently had to let go because I couldn't convert their awesome in to money.

Finding employers that are good at that, and that derive a lot of value from what you provide is a harder problem to solve, but more rewarding financially in the end.

Reading "million dollar consulting" (allan weiss) changed a lot of my thinking on this subject. It feels a bit dated now, but conceptually thinking about value instead of time for money, even if time for money is all you can get, still changes your perspective some.

Gentle plug: http://indieconf.com - coming up in just a couple weeks - will cover topics like these (specifically a session on "science of pricing" with Brennan Dunn) for freelancers.

Reasonable time frame is often 5 years a large company.

This is probably exactly the wrong way to think about your rate, as it hinges on "how much you want to make every month"; in other words, it's a cost-based price.

Your rate is set by the market, not by your "reasonable" desired salary is.

In case you're wondering at this point: I think you should be charging more than this tool says you should. And, obviously, I don't think you should be billing people by the hour at all.

>Your rate is set by the market

It certainly ought not be. That your rate resembles the market is a CONSEQUENCE, not a driver. The driver of your rate needs to be based upon the value of your services. Are you going to enable a company to make $500,000 more next year? Then if they want to pay you $50/hr because it's 'market rate', you need to tell them to kiss your ass.

The presumption is that everyone is already doing this, and that everyone has a reasonably correct understanding of what the actual value of their work is. This is a false presumption, but it is a presumption which is absolutely necessary for any defense of capitalism. Knowledge of value has to be spread equally or all of the promises of capitalism fall apart. Anyhow, if everyone DID know what the value of their work was and set their prices by that, the idea is that a market rate would establish itself, which certainly would happen. What we've got today however is employers telling everyone to set their rates by the 'market rate' and ignore any other drivers... which makes it very easy to drive down the price over time. That would be why the average salary of the lower 90% of the economy has only risen 1% in the past 30 years, even though worker productivity and corporate earnings have skyrocketed.

I don't really follow this, but I think we're in agreement that fundamentally your prices need to follow the value that your work generates; that value is orthogonal to what you feel you need to be making every month.

Cost-based prices are for gypsum and tile wax.

I look at it like, "here's how much I need to be able to charge per hour, what can I do to make my time worth that?"

It's probably a mistake for most people to think about how much they "need to be able to charge", because you are going to be surprised at how much you can actually charge, and working your way back from a target rate will prevent you from discovering that.

I know people who started out expecting, optimistically, to be able to charge (say) $120/hr, and who just a couple years later are shocked to discover that they're worth multiples of that.

"Obviously" ... How?

I've written more about not charging by the hour on HN than any other subject other than password hashes. Charge by the day.

Nice really simple and clean and one of those, I wish I'd thought of that moments.

Couple of things I'd change.

First ( probably me being dumb ) but for some reason I clicked on "Money per month" first rather than "amount". Maybe a dollar sign in the text box would help. Although I realize this has probably been done deliberately so it's currency agnostic.

I wasn't allowed to put in period characters, I tried to put in 37.5 hours ( standard week in the UK ) and it put that as 375 hours, which screwed the results just a little bit.

I also clicked on "Money per month" first rather than "amount". I think I'm used to the edit box being on the right?

I did the same, but I have a feeling it has more to do with the size of the boxes than the ordering in this case.

You've hit the nail on the head. Thinking about it that's exactly why I clicked "Money per month" too.

I did the same, I clicked on the right hand label, not the field.

Another thing I got wrong was whether the amount I want per month is after tax, i.e. what I can spend.

I initially thought those were sliders that I was supposed to drag. :)

Me too. You have a super simple site, and now the comments to make it super easy to use. Cool tool.

This is pretty light. Take a look at the calculator at FreelanceSwitch.

http://freelanceswitch.com/rates/

To be fair to him, that's a little heavy, I looked at it, scrolled down to the bottom then closed the page.

Nice design, but not sure about the concept: this doesn't calculate what you're worth or advise whether the figures you're stating are realistic; it just does what you could do in 10 seconds in excel. My test-self is worth infinity per hour just for being really lazy; not wanting to work any hours a week, take 52 weeks a year off, and earn a fortune for it. This could be improved by including the market rate which you dismissed to give an idea of how realistic this is, or by suggesting jobs and relevant qualifications/experience required to get to where you want to be.

Thanks for all your comments. My goal with this site is to get you thinking about your freelance rate / business in general, a starting point if you will. I'll be doing an iteration on the design and copy shortly.

The 1.5 factor for taxes and savings might be accurate for the US, but is way too low for some places (a factor of 2 would probably still be too low)

Yep, in Austria taxes and insurance are approaching and even exceeding 50% of your income when you cross €100k per year.

I live in the Netherlands where we too have a high tax rate. If you make an average income, 1.5x would suffice. Anything above that, 1.5x falls short. The reality is that the vast majority of freelancers stay well below 100k per year. I've adjusted the calculation to 2x to account for higher incomes and to be on the "safe" side. Thanks for your feedback!

i love the simplicity of this, but it's almost too simple. this doesn't take into account things like experience or skillset which I have found to be key indicators for hourly rates. it's also unrealistic in that many freelancers have gaps in work and dont work all the hours they want in a given period (something we are trying to fix!).

as i've been getting top freelance devs on matchist, i've seen hourly rates range from $50/hr to $200/hr with the biggest indicators of higher rates being: self perceived value, years freelancing, and self perceived expertise of skillset.

we've made the conscious decision not to charge devs by hourly rate, but rather project milestone values.

Gentle plug: the site we're building, http://matchist.com is curated matching of projects for top freelance devs.

I've always based on a mix of what the market rates are vs the value i'm providing the client.

If i'm creating a solution that will save the client about 50k a year, i'd probably charge about 25k. To the client, thats a damn good deal, and if it takes me 3 months or less to build, its a damn good deal to me too.

The multiplier isn't high enough. It doesn't take into account un-billable time that you need to spend on sales and marketing or higher tax rates in different parts of the world. It's more realistic with a multiplier of 1.8 to 2.0

Money per month, is that value I enter suppose to be gross or net? I'll assume gross and have to agree with others that said this is a bit too light (as in not enough inputs).

Nice. I created this exact same calculator in the spreadsheet I'm using for my freelancing. It's kind of amusing how few knobs there are to twiddle for freelancing.

£10 per hour... not bad.

I love the simplicity of this, it's definitely a lot easier than thinking about it myself.

There's no situation where you should ever be charging so little! That's only just minimum wage.

Minimum wage in the UK is £6.19 if you're over 21, and £4.98 if you're 18-20. So it's quite a lot better than minimum wage, especially if they're under 21. It's probably true that they could do a lot better, assuming they're reasonably competent.

I make 50% of minimum wage in my professional full time job as a PHP web developer in the UK, so at this moment in time, "only just minimum wage" looks pretty darn good.

My guess is he's a self employed guy without the contracts coming in, or employed PHP web developer who also works in the evenings & weekends for a fixed annual salary which is then taxed?

I answered this in the comment below yours :)

You are kidding me right? Are you on internship?

I seem to have answered your question in the comment above before seeing this one :)

How do you make less than minimum wage legally at a full time job?

It's an apprenticeship, I work 40 hours per week at 2.60 per hour, I have rent to pay, council tax, bills, transport, etc. I came in to the job with 2 years freelancing experience, but as I had just moved countries from Spain I took the first offer I got, which was my current job.

My family all live in another country so I live on my own, after taking housing benefits in to account, I have £12 per month to myself (that's for food too, I eat a lot of noodles) - unfortunately, this is just a tradeoff I had to make in order to get myself working in this industry, everyone has to start somewhere.

I've been looking for a better paying job for the last couple of weeks and have some interviews, but to be honest, I figured most companies would jump at the chance of getting a 3 year PHP freelancer with a years experience with CodeIgniter, Joomla (1.5 and 2.5) integration and his own Google certified individual in Analytics and Adwords certificates.

Also, if you know anyone who is hiring in the north of England, please send me their email or url, might as well use HN to find jobs too as the "who's hiring" topic very rarely features PHP jobs in England.

Love the simplicity of the design.

Interesting, it has provided me with the exact value I am charging right now ($33).

Great job on the site! I love sites that look great and work well like this.

What am I supposed to do?

Doesn't work on the iPhone. Can't read left text boxes.

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