Contractor rates of pay
For many people, the appeal of becoming self-employed is the fact that you are often able to command higher rates compared to those working in employed roles.
There are many reasons behind this; for a start, a contractor has usually dedicated themselves to a particular skill, so it’s more likely that they are both highly skilled and experienced in their field.
There’s also the fact that self-employment not only comes with more risk but those working in the sector are not entitled to certain benefits, such as holiday and sick pay.
Read our Benefits of Contracting page for the top reasons why people choose the self-employment route.
Freelance web developer – Daily, hourly or fixed rate?
How you charge for your work, whether that’s a daily, hourly or fixed rate, might change with each project, or you may even find that a client has their own preference.
Here are the pros and cons of each method:
Daily rate
A daily rate can be the easier option for both the contractor and the client in the sense that the contractor will have a better idea of how much they’ll be earning for a project and the client will also know how much they’ll be spending, which will help them from a budgeting point of view.
A contractor can also often charge more when it comes to a daily rate compared to an hourly one.
However, it’s worth being aware that if the client asks for additional work to be done within those days, which could essentially be seen as ‘over-time’, the contractor could miss out financially.
Hourly rate
An hourly rate can benefit a contractor if a project takes longer than expected, but it can become an issue should a client limit the number of hours that a contractor works on a project in order to cut costs.
Fixed rate
A fixed rate means that you know exactly how much you’ll be earning for a project, however, when setting this rate, you have to really think about how long a project will take, as you could find it takes longer than expected meaning you’re potentially being underpaid.
Take a look at our Contractor take home pay calculator to get an idea of how much you could take home either working through a limited company or under an umbrella.
How much do I charge as a freelance web developer?
Once you’ve decided how you’re going to charge for a project, you’ll then need to consider what your rates will be.
When it comes to calculating figures, it can be helpful to have an annual amount you think you should be earning and then divide it to get to an hourly or daily rate (taking weekends/holidays/bank holidays into account), and then apply this method to fixed rate projects when you’ve worked out how long it’ll take you to complete the project.
A lot of freelancers can find this part quite difficult; it’s not easy working out what you and your skills are worth, but it can be helpful to find out what other self-employed professionals in your position are charging.
Look for other freelance web developers online and find out their rates; compare your experience and skills to theirs to see if you could charge similar rates.
Your experience will of course have an impact on how much you can charge and don’t forget that each project you take on might need to be charged differently, depending on how high value the service is.
It’s also worth considering negotiating rates with a client – the reason being that they might not have a massive budget, but if you charge reasonably you could find that they offer you additional work.
We hope you’ve found this page useful. If you need any further information, please call one of our friendly experts on 01442 795 100 or email sophie.lewis@dolanaccountancy.com. Alternatively, contact us via live chat.
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