I follow a simple set of guidelines when setting my rates. This is based on:
- How much do I need to earn per hour to pay my bills and live the lifestyle I want.
- How much do I need to save in my rainy-day-fund?
- How much is the client willing to fork out for my service
- How much I have invested into my skills and work environment.
So, let’s say I calculate that my bills + total living cots in a month is 2000USD per month. If I want to work 40 hours per week, I would need to earn (after tax) 12.50USD per hour.
I also want to set aside some cash for bad times. My goal is roughly to set aside 500USD per month for this rainy-day-fund. That means I would have to earn (after tax) 15.60USD per hour.
I then have to calculate my investments. I’ve spent roughly 5000 USD on my setup to produce voice-overs over the years. I’ve earned that back, so the “investment part” of my income now goes toward improving my skills, and for marketing purposes. I calculate roughly 500USD per month for marketing and learning.
So that brings me up to 18.75USD per hour needed to fulfill my income goals, when working 40 hours per week.
Naturally, I do like profit, and I’ve set myself a goal of having roughly 20% profit (fun-money - or you can be smart, which I’m not, and save them for something you really want to buy down the road.)
So, adding 20% profit on top of my needed income, I end up having to earn roughly 22USD per hour.
With that out of the way, I can calculate how much time I spend on average, doing an order. Let’s say a 100 word voice over (with prep, editing, and customer service) will take me on average 30 minutes. Then, that 100 words has to cost 20USD if I’m rounding up to make this simple. Fiverr takes 20%, so I’m left with 16USD. Paypal/banks/currency exchange takes a bit in fees, so I’m left with roughly 15USD.
Add to that my 30% income tax, 10.50 USD for 30 minutes of work.
That means I’m making 21USD per hour (on average) after tax with my current gig pricing.
(I suck at math, so my numbers aren’t perfect, but you get the idea).