8 Ways to Answer “How Much Should I Get Paid?”

Many gig workers know what it’s like to try to set prices with a new customer.

Should I choose an hourly rate or follow a project pricing strategy? How do I calculate overhead costs? How do I convince my potential clients that my good work is worth paying for?

And with so many different types of freelance contracting businesses, it can be difficult to find business models to model and this also allows you to know the best price for your business.

After picking the brain of seasoned freelancers, business professionals, and entrepreneurs across the country, we bring you this list of tips to help you set your rates, and most importantly – feel good about them.

An 8-point guide to answering how much should I charge?

Here’s our eight-point guide to help co-workers answer the question, “How much should I get paid?” Understanding these tips is the best way to ask for a competitive price for your business.

1. Understand current prices

Whether you’re completely new to a field, or you’ve been around for a while and are wondering how to increase your rates, the first thing you’ll want to do is a little research.

“A big part of pricing your services is looking at what other people who offer similar services are charging,” says Kyle Dooley, co-founder of Influencer Open Market. colabster. “If you have a solid portfolio of business to show off, then you can charge more than the industry average, but that’s usually not the case when you’re new.”

Spend some time figuring out what others in your field are charging at different skill levels and years of experience. You can do this by searching for job openings that share information about required experience and compensation, or even by asking in your professional network. Some networking groups can also help you determine the fee structure.
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Prices can vary in different regions but with remote work still going on now, you can still live in the country and get big city cash depending on the type of work you do.

When you start setting your own rates, check your social networks (like Facebook social networking site And the LinkedIn) and online forums (such as reddit) to ask around you. A lot of freelancers and freelancers remember that they are new to the industry, and will likely be happy to provide some ideas.

2. Calculate correctly for your own business

Once you gain a basic understanding of the rates going on in your industry, it’s time to start analyzing the numbers and coming up with a pricing strategy.

Before you get too deep into these calculations and settle on a project rate, you’ll need some time to really understand your workflow and how long it will take to complete the task. Is it something that will take hours or is it a week or more?

“The biggest mistake I see other teachers make when setting their grades is not including prep work as a factor in their grades,” says Kristen Thorndike. Nerds test prep. “For me, I think of the materials I shall prepare as well as the time I shall spend preparing the lesson for the student; and factor all this into my prices.”

Depending on the type of work you plan to do, there may or may not be behind-the-scenes work — and you’ll want to make sure your pricing reflects that work as well as the end product.
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3. Factor in taxes and insurance costs

Since you won’t get your annual salary from working full-time for someone else, it’s important to keep these costs in mind whatever rates you set. You are responsible for your own benefits.

This means your compensation retirement savingshealth insurance and even tax payments. A good rule of thumb is to plan to allocate 30% of your total income to taxes, and 10-15% to retirement.

Consider opening separately savings accounts To keep these funds organized, or even schedule automatic deposits. Whatever you do, just make sure that you prioritize your financial well-being when setting your rates.
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4. Avoid hourly rates when possible

As you prepare to set your rates and research clients, it is important to consider the different types of payment models available to you. As a writer, this may mean providing rates per word or rates per article.

But as a teacher, this may mean setting a fixed price per session, or even a weekly rate for many hours of teaching and support. Whatever you choose to do, we recommend avoiding hourly rates whenever possible. Be prepared to discuss the reason for this with potential clients.

Says Vincent D’Ellito, Founder and CEO of word agents. “Charging by the word makes a lot more sense than charging every hour. The thing is, you’re likely to get better at everything you write about over time. So while it might take two hours to write a blog post at first, you’ll probably cut it down to 30 minutes in the end, And you don’t want to make less money to work faster.”

The same can be said for many temporary job positions, whether it’s content creation, teaching, or even sitting at home.

Ensure that the prices you set do not limit you to a lower payout cadence as your skills improve. Whenever possible, charge through the work – not the time it takes. If that’s not possible, at least be prepared to regularly increase your rates, which we’ll dive into next.
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5. Increase as you go and don’t forget the overhead costs

Whether you charge by the hour or not, regularly increasing your rates is a part of the business world when it comes to making good money as a gig worker. A gradual increase is not likely to scare the customer, especially if you are providing a valuable service.

For some people, this may mean raising prices after gaining more experience. For others, that may mean setting a regular schedule of increments, say once a year. Don’t overlook the cost of doing business either which includes office furniture, supplies, technology and even wear and tear on the car.

Prices can vary in different regions but with remote work still going on now, you can still live in the country and get big city cash depending on the type of work you do.

“Every year, I re-evaluate my experience with my existing gigs and raise the rate by 10%,” says Thorndyke. “I simply tell the parents that I will raise my rates for the year and let them decide if they want to continue educating their children. I have found that a 10% fair increase for a teacher is usually easy for parents to absorb once they know you have been successful with their children.”

Freelancers and freelancers quote raise rates of 15% or even 20%.

“I would say that increasing it by 15%-20% is often a safe way to do it,” says a freelance B2B tech writer. Martin Soto. “If someone pays you $100 per article and they are happy with your work, it wouldn’t be a disgrace to increase your price to $120.”

If you are just starting out in the industry, you might consider getting rates a little lower at first and increasing once you have a few months of experience. Just make sure you don’t fall into the old trap of undervaluing your business. Which brings us to the next point.
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6. Don’t underestimate the value of your business

Freelancers and freelancers everywhere are guilty of this, and it is very easy to fall into the trap when you find out your fee structure.

For gig workers who have a lot of experience in a particular industry, the customer has to pay for that experience, which is why hourly pricing isn’t always smart. It may take up to three hours to do the job but that’s because you have 10 years of experience behind you.

So, you have an amount that you want to earn, but the potential customer does not want to pay. Does this mean that your prices are too high? may be. But it could also mean that he went over the client’s budget. Maybe you can convince them otherwise.

Most commonly, the self-employed are simply afraid of asking for too much money – thinking it might ruin their chances of employment. Here’s the thing: In all my years of freelancing, I’ve never had a bad experience setting fair rates for myself.

Do I have jobs that I don’t accept because their prices are too low? Yeah. Have people told me they can’t afford my prices? Yeah. But these conversations don’t necessarily close doors, and they certainly don’t spoil professional relationships.

Oftentimes, clients and companies that hire freelancers or freelancers will try to get the best work possible for the least amount of money. Sometimes it works to their advantage, other times it doesn’t.

You never know what a client’s budget is, or if that budget will change in the future. As long as you have the experience to back it up, and can afford the job transfer if they don’t want to pay your rates, go ahead with your goals.
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7. Find out what you need

One thing that new freelancers may not expect, is that freelancing of any kind can be a very disruptive way to make money.

What do we mean by this? Basically, things can change – a lot.

Some months, you may have more work than you really want, and others you may be searching frantically around a new client. This is why it is important to know where you are (financially and practically) before accepting a new job.

“Every price conversation should take into account your needs and ability, and this can vary from season to season,” says Reagan Hoffman. Union of Independents. “You might find that you’d rather lower your rates a little bit in order to sign a long-term contract with a client, if you need more stability at that moment. Or you might get something else out of the job besides money—a chance to practice a new skill, maybe a great reward or opportunity. Swap – This means you agree to a lower rate.”

Just like any kind of job, party work is all about finding the right balance. If you’re stuck in a month when you really need the money, it might be a good idea to get a low paying job.

Does this mean you are underestimating the value of your business? No. It just means that you do what you need to.

On the flip side, you may be overwhelmed with work and have someone give you more. This is a great place to be a factor, as long as they offer the right price.

If you’re new to the huge business, this may not happen right away, but once things have rocked and rolled, you’re bound to take on the challenge. Which brings us to our last tip.
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8. Stay motivated

Motor work of any kind requires a great deal of self-motivation, especially when all of the work adds up to your annual salary. Slouching – at least laxing a lot – is not an option.

Without someone telling you what to do, you will have to manage your time on your own – which can be much easier said than done. That’s why it’s important to make sure that you accept the work that motivates you. This motivation may depend on the work itself, the growth opportunities involved, and of course – how much you get paid.

Price your services correctly and the motivation will remain constant.

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“It’s important to remember that pricing is not a one-size-fits-all,” Dulay says. “When you gain experience, you should rate yourself according to how much you value your time. If you take jobs at $15 an hour but feel overwhelmed and not motivated to complete the job, that’s a good sign that you should price your services higher.”

He says it’s the “good” price for your services that motivates you, and still brings in enough clients to support your own business.

We can’t say it any better for ourselves and there is still another way to answer the question, “How much should I get paid?”

Contributor Larissa Runkle specializes in finance, real estate and lifestyle topics. She is a regular contributor to The Penny Hoarder.

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