Many people assume figuring out what your hourly rate should be is a simple task. If you’re a freelancer who wants to make $30,000 a year, just figure out how many hours you work per year and divide, right? Not quite. And as any veteran freelancer will tell you, calculating desired rates requires a much more complicated equation.
Basically, before you know thy employer, you must know thyself. BeeWits, a project management software company, wants to help you with that process, and the company’s new rates calculator is straight out of a freelancer’s dream.
In the past, BeeWits has released a number of creative and business-oriented tools for freelancers. (The company’s main software product is meant for web designers.) Their web quotes generator, for example, provided a nifty, professional-looking way to put together the costs of a single project and send it to a client.
“Using the quote generator, however, assumed that you knew how much you charge per hour,” Richard Muscat Azzopardi wrote on BeeWits’ blog, The Hive. “This might not always be as straightforward as it seems.”
Truth. On The Freelancer, Nicole Dieker has written about all the considerations that need to go into figuring out your hourly freelance rate. We’ve also covered how to charge extra for rush jobs and how to handle late payment. Your rate should not only take into consideration where you are now, but also where you want to be in the future and how much your time is worth. Thankfully, the BeeWits rate calculator asks all the right questions.
That’s probably the best part of this calculator: It literally asks you questions so every step is as clear as possible. There are 19 fields to fill out, with the option to add additional categories or skip existing ones.
You start off by inputting your current annual salary and can also enter a percentage or dollar amount you’d like to improve by in the coming year to see how much your rate needs to be adjusted. Then plug in everything from billable days and working hours to vacation days and public or religious holidays.
One of the more interesting aspects here is the distinction between how many hours you work and how many hours you can bill. For a writer who works off of flat rates, there won’t be a difference. But for anyone working on projects that include copywriting, ghostwriting, consulting, etc., there may be a subtle difference in output that should be reflected in your financial planning. If you’re particularly detail-oriented, our Freelance Rates Database can help you forecast as well.
Oh, and if you work in Euros or Pounds rather than Dollars, BeeWits has you covered.
The calculator also takes into account all the potential overhead costs of freelancing, including your rent, travel expenses, equipment, subscriptions, and other expenditures. Just flip a switch if the individual cost is on a monthly or a yearly basis.
Press “Calculate My Hourly Rate” and presto! Your rate, down to the cent, pops up. It would be great to have an explanation of the calculator’s exact formula, for transparency’s sake. And we’d also love if the calculator could save your numbers to refer back to in the future. But if you’re looking for a thorough tool that can take care of some multi-variable accounting, this is perfect.
Want to get paid well to work on projects you care about? Click here to learn more about freelancing for Contently.