Estimating freelance rates
Now you understand there are two ways a freelancer can price a project, but weliketowork.com chooses to use time-based rates to ensure successful project completion through fair rates, we can start to explore the typical rates freelancers will charge.
1) Start with a full-time equivalent
To get an good estimate of what rates you should expect to pay for a freelancer, a good place to start is what salary you would expect to pay for a full-time equivalent.
For example, here are some example salaries taken from the Office of National Statistics
- Web developer - average UK salary = £40,000
- Book-keepers - average UK salary = £21,000
- Copywriter - average UK salary = £33,000
High demand skills
Please note, the examples above are mean averages across the UK. There are going to be skills and talents in extremely high demand, which takes the cost for these people significantly over the average.
Data: ONS - Employment and Labour Statistics - August 2016 www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours
2) Add 30%
The Association of Independent Professionals and the Self-Employed (IPSE) recommends taking the equivalent earnings as an employee and adding 30%. The extra 30% accounts for the added costs the freelancer has to pay in order to provide their service. Jordan Marshall, policy development manager at IPSE, says: "Whatever your profession, [as a freelancer] you’re responsible for your sick pay, holiday pay, for any equipment you need – and your client [should pay] this premium in return for the flexibility you provide."
For using the above, the full-time equivalent salaries with 30% added are:
IPSE quote - www.theguardian.com/small-business-network/2016/aug/31/freelancer-what-rate-charge-price-work
- Web developer - freelance equivalent average UK salary = £52,000
- Book-keeper - freelance equivalent average UK salary = £27,300
- Copywriter - freelance equivalent average UK salary = £42,900
3) Validate the use of a freelancer
You might be asking, "If a freelancer is 30% more expensive, why don't I just hire a full-time employee?"
It's good question. But there are number of a reasons why remote freelancers are a better option in a lot of cases.
- Full-time employees cost more than the base salary
In addition, they cost tax and National Insurance contributions, they also get paid holidays, sick pay and need equipment. Using a freelancer saves you these overhead costs.
- The hidden workforce
The people you can access through a freelance marketplace may not be open to a full-time job. They might already have one, or be unwilling to travel or relocate.
- You might have a short-term requirement
If you only need help for a really specific project that lasts 2 weeks, there is no sense in hiring a full-time employee.
For more help on deciding what projects to outsource, read our guide on what projects you should outsource.