rates

My hourly rate has to cover a lot of different things, and the portion I actually get to keep is a lot smaller than you probably realize. Read on to find out why my rate is what it is.

Brass Tacks

My general rate is $115 per hour.

To a large company or agency, this is on the low end. To a startup or non-profit, this is probably at the upper end of what you’re wanting to spend. While I could be charging more, I try to keep my rate at a place where I am still reasonably affordable to non-profits and startups, because I really enjoy working with them.

For anyone who finds that rate to be extravagant and thinks I prance around in diamond-bedazzled Chuck Taylors, here’s a breakdown of where that rate comes from and where much of it goes.

Income Tax

The government collects a sizeable chunk of my earnings in income tax, pre-paid in quarterly instalments. So keep in mind that I don’t even get to keep nearly 25% of what you pay me.

Vacation

Yep. My rates pay for my vacation days. Just because I’m a freelancer doesn’t mean I don’t have a right to get away from it all like everyone else. If you work full-time for a company, you are likely taking off from work several weeks a year and still getting paid for it. I want to do that too. And trust me, I don’t go on vacation very often, and when I do, they’re not extravagant. Once upon a time my vacations were motorcycle camping trips, sleeping on the ground on a thin mat, and eating meals from a can. I’ve upgraded to more bed-based vacations now, as these old bones crave more creature comforts.

Software & Office Supplies

Adobe Creative Suite isn’t cheap. And there aren’t exactly a lot of appropriate feature-filled alternatives (Canva is no replacement for the Adobe Suite, to be clear). Generally speaking, if you can make a career at something, the software used to do that is priced accordingly. And once I’ve bought that, I need to make sure I have a speedy up-to-date computer (I get paid hourly, so the faster my computer works, the faster your job gets done, and the less you pay), a large, high res display to scrutinize my designs, a mouse that doesn’t make me want to toss it out the window, a keyboard that I can pound away at comfortably, a printer that can give me reasonably accurate proofs, and all the notebooks, pens, and sticky notes that I can handle. Oh, and don’t forget my coffee maker.

Benefits

Most people have no concept of what benefits cost. Your employer, if you have half decent benefits, is spending thousands of dollars per year on your benefits, whether you use them or not. Since I don’t have someone supplying me with benefits, it’s up to me to pay for those. Because the next time I do a header over my bicycle (something I have in fact done), I might knock out my front teeth, and I’ll be grateful that I didn’t skimp on benefits.

Admin Time

There’s a lot of up front and post-project administrative time that goes into my job. I’m everything. I’m not just the designer—I’m the accountant, I’m the office administrator, and I’m the salesperson. I respond to a lot of email queries that never result in any work. I do research on new digital technologies, I keep up on the latest enhancements to Adobe Creative Suite, and find more efficient ways to do my job. I do a ton of back and forth with clients and potential clients that for various reasons is never billed. I do time tracking and invoicing and estimates. This is all working time, and it needs to be accounted for in my rates, because I may work a 40+ hour week that only includes 23 hours of billable project work. I still need to get paid for all of that working time.

Quality

Last but certainly not least—that old adage “you get what you pay for” tends to ring true in the design world. I’m good at this, I’m knowledgeable, and I’m efficient. I have a lot of experience. If you’re good at something, you should be able to make a decent living at it. You shouldn’t have to struggle. I try to charge what I feel my work is worth. If watching Home & Garden Network for hours on end has taught me anything, it’s that when you get renovations done on your home and you hire a cheap contractor, you tend to get shoddy work. Of course that doesn’t mean that everyone charging higher rates is worth it, but that’s why you have testimonials and portfolio pieces to help you decide if I have the skills and attitude to justify my prices. Trust me—anyone who’s really good at this isn’t going to come for cheap. Why would they? No one is going to charge less when they can be charging more, unless they’re doing it for charitable reasons. And since I haven’t won the lottery lately, I’m definitely not in a financial position to be charitable.

In short, I can guarantee you that I’m not getting rich off freelancing. I’m not struggling either—I’m comfortable. There are occasional months when I go through lulls and things get a little bit tighter, but for the most part I’m keeping afloat and enjoying the (modest) things that make me happy.

Some added context for you

When I worked at an agency, my time was billed out to clients at $150/hour. I was salaried and my salary worked out to around $40/hour if I worked a 7.5 hour day (I almost never worked a 7.5 hour day—generally my day was around 9+ hours). Obviously there’s a lot of overhead at an agency to account for that discrepancy, but there’s also a lot of profit hiding in those numbers—especially when a person who isn’t paid hourly is billed out hourly. Now I get paid for every hour I work, and I’m no longer working long (unpaid) hours to make someone else wealthy.

Work-life balance is really important to me, so now I try to keep to a 7.5 hour work day (which is usually between 4-6 hours of billable time, and the rest is administrative—answering emails, invoicing, time tracking, general organization, etc). I have also recently switched to a four day work week, with Mondays off. I’m a much happier designer for it. Agencies have become a competitive bloodsport to see who can work the longest hours and suffer the most. It’s not healthy, and it’s not how I want to spend my life. I may love design but I love a lot of other things too, and no one lies on their death bed lamenting that they could have worked longer hours.