What’s an hour worth to you?
Valuing your skill and time can be challenging. Plus, placing a dollar value on a piece of work always seems stressful. However, if you’re new to freelancing, determining your rate is an important first step.
Most freelance writers choose to bill by the hour, the word, or per project. In this article, we’ll discuss the benefits and drawbacks of each option.
Choosing a pay structure
Since freelancing is a job, a vital consideration is your rate and fee structure. There is no one-size-fits-all approach to freelance rates.
According to a 2018 survey by ClearVoice, 60% of freelancers use a mix of payment structures and it usually depends on the client or project. 12% charge per hour, another 12% by word, and nearly 16% charge by retainer (or per project).
If you’re new to freelancing or just adjusting your system, looking at the pros and cons of different fee structures may be helpful.
Charging by the word
Charging by the word is standard for freelance writers. A per-word fee means the amount paid is equal to the words written. These types of agreements typically don’t account for revisions or any work outside of word count.
Charging by the word may make sense for projects like:
- Blogs or articles
- Website copy
- Research papers
- Technical writing
The benefits of charging per word
There are many upsides to charging per word, such as:
- Insurance for longer pieces: If a client’s brief is unclear, or significantly underestimates the length of a piece, a per-word fee structure pays for all your work.
- Easy budgeting: If your goal is to make $500 a week from freelance writing and you charge 5 cents, you know you need to book projects equalling 10,000 words. Many freelance opportunities state the word count requirements upfront. So, you can plan ahead and budget accordingly.
- Low sticker shock: Project or hourly rates may seem too high for some clients. A per-word fee will appear more affordable. The seemingly low cost of a per-word rate may win you some more gigs.
The drawbacks of charging per word
Charging per word can sometimes be a challenge. Particularly when it comes to time, effort, and other activities that are not writing, such as:
- Accounting for revisions: Typically, a per-word fee structure is just that. You get paid for words. Period. Therefore, any work like revisions isn’t accounted for in the freelancer rate.
- Research vs. writing: A per-word fee structure is best suited for projects that consist of words on paper. It doesn’t cover time spent researching, conducting interviews, or sourcing media.
- Contract negotiations: One of the biggest struggles of charging per word is determining which word count will pay out. For example, is that agreed upon 5 cents per word guaranteed up to the word count requested by the client? Will the client pay for additional words beyond the word count? If choosing to charge by the word, be sure to read your freelancer agreement or discuss it with your client in advance.
Charging by the hour
Freelancing by the hour can often remove some of the pitfalls of charging by the word. To charge by the hour, simply track how long it takes to complete a specific project. This time should include research, writing, interviews, meetings, and revisions.
Charging by the hour may be useful for:
- Multimedia projects
- Video editing
- Graphic design
The benefits of charging per hour
Some freelancers recommend an hourly fee structure because it very clearly states how time is money. If you are working on a project, you are being paid for that time.
Some other benefits of charging by the hour are:
- Managing scope: An hourly fee can help reign in projects that are too large to quantify for a per-project fee or per-word fee. If your work requires lots of meetings, interviews, or research time, charging by the hour makes the most sense.
- Dedicating time to research: Digging up specialized information can take a significant amount of time. While a per-word structure does not expressly cover research time, a per-hour fee would.
- Fitting with a corporate structure: Some industries or clients may prefer an hourly rate for their accounting system.
The drawbacks of charging per hour
Charging by the hour is not for everyone.
Some downsides are:
- Underselling your time: If a project you expected to take only an hour suddenly takes 5 hours, your workload can quickly become overwhelming. This can make an hourly fee hard to scale if you take on multiple clients.
- Failing to budget: The opposite of underselling your time is overselling. If you planned to make $100 on a project, but it took half as long as you expected, you will not meet those expectations. Charging by the hour can make freelancing even harder to forecast.
- Punishing efficiency: Typically, being faster and better at something is a good thing. However, if you’re charging by the hour, improving your efficiency doesn’t make financial sense.
Charging by the project
A per-project freelance rate is a flat fee. That means you get paid the same no matter how long it takes you or how long the final product is. The biggest challenge with a flat fee is setting the right price to account for work, research, and revisions.
A per-project fee structure may be right for:
- Ongoing social media content
- Content strategy
The benefits of charging per project
Some of the pros of charging per project include:
- Cultivate ongoing relationships: Setting a flat rate means a client can consistently budget for your work. Making you a writer they’ll return to again and again.
- No surprises: For both you and the client. Charging per project means there’s no confusion at the end of the day.
- Wide variety of work: Freelance projects that require strategy, ongoing work, or editing can be hard to account for.
The drawbacks of charging per project
As mentioned above, deciding how much a freelancer should charge is always a struggle. Including when charging per project. Some drawbacks of per-project pricing include:
- Undervaluing yourself: When first pitching or accepting an opportunity, it’s hard to really see all the work needed. Many writers undervalue their time and work and accept project fees that don’t translate to an equivalent hourly price.
- Sticker shock: If you are working on a large project like ghostwriting a book, a flat fee will be a big number. While clients know it takes time and money to produce such a large piece, it can be an off-putting number.
- No negotiations: Even if the price was fair in the beginning, project scope can lead some freelancers to regret their per-project fee. If you’re stuck in endless meetings or rounds of revisions, there’s no way to be paid for that time.
Find freelance projects to fit your style
Freelancing is a great way to take interesting work on your own schedule. Whether you want to freelance full-time or just on the side, ClearVoice’s talent network connects qualified freelancers with real opportunities every day.
To get started, sign up with ClearVoice.