Tool #1: How much to charge for your design work?

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To define how much you should be paid for your design work, you can make use of guidelines to objectively work out your fee. The guidelines take into consideration that your fee does not only need to cover your living expenses, but also your overheads, such as costs for rent, broadband, up-to-date machines, pension schemes, etc. Working out your fee according to such guidelines not only allows your practice to become viable, but provides a rationale to the estimates you present to your clients and avoids contributing to the general wage dumping that makes earning a living difficult for everyone in the field.
 

OPTIONS FOR PRICING YOUR WORK

There are four main options for setting your fee:
• fixed-price
• day rate
• hourly rate
• a combination of the first three

It is up to you to decide which option fits your needs, working methods and the nature of the service you deliver (for example, multi-faceted long-term projects vs. Photoshopping).

Costs that you incur in realising the project, such as project materials, necessary trips and food, need to be charged on top of your fixed-project, day or hourly rate. Taxes also need to be added on top of your fee.
 

Fixed-Price

A fixed-price not only allows you and the people you work for/with to agree on the standards of the project to be delivered, but allows you to know how much you will earn and your client to know how much the end result will cost. To define a fixed-price, you can use an approved scale of fees proposed by the professional associations of the country you work in as a point of orientation. For pricing work, the scale of fees assumes an average complexity of the project in question and an average experience of the designer developing it.

When adopting a fixed-price strategy, it is important to fix the standards and processes involved in a project so that the client cannot ask you for unlimited re-designs or, without consideration, add unpaid tasks or project features.

To deal with changes occurring within a fixed-price project during its development, it can be useful to break the initial estimate down into the costs of the smaller tasks that contribute to the overall result, such as:
• initial consultancy
• concept development
• design
• re-design
• overseeing the production process

Such a breakdown allows you to renegotiate the fee in very precise and defendable terms should unexpected issues or requests arise.

Examples of fixed-price rates as suggested by the BDG (Professional Association of German Communication Designers) and the AGD (Alliance of German Designers) in 2014:
Website (design only): 20h / medium difficulty / medium size / approx. 3500€
Poster: 18h / medium difficulty / approx. 3000€
Postcard: 3.25h / medium difficulty / approx. 550€
Illustration, full page: 8h / approx. 1000€

Tools:
Honorarrechner BDG – fee-calculator available as a widget for Apple Macintosh, only in German, full functions available only for paying members of the association;
AGD (Alliance of German Designers) scale of fees, available in print, German and English
 

Day rates

Day rates are often a good fit for:
• design work that hovers between design and consultancy
• design and art
• design and participatory practice

This is because they acknowledge that these kind of productive, yet often more open-ended, situations need more flexibility. While day rates (ideally) allow for a more tolerant approach to time and money, in commissions that are more open-ended and authorial, they can also be a helpful guide to avoid spending more time on a project than you can afford.

Examples:
Consulting: €800/day (suggested by AGD)
Newly graduated artist day rate: £191
Artist with 5 years experience: £234 (both artist rates suggested by the A-N Artist Information Company)
 

Hourly rates

Hourly rates function well when it comes to:
• small design interventions
• solely technical/executive work
• updates and modifications to already finished projects
• for out-of-scope-work that occurs within a fixed-price project.

In these cases, knowing your appropriate hourly rate allows you to reasonably charge clients for tasks even if they might each only take up 20 minutes of your working day (such as updating a website).

Knowing your hourly rate (but also your day rate) is also helpful when you are approached by a client with a fixed budget for a certain project. By dividing the budget with your hourly fee (or day rate), you will know how much time you can reasonably afford to spend on the commission.

Examples:
30€+IVA – the hourly rate of a plumber in Central Italy (Ancona)
35€+IVA – the hourly rate of a plumber in Northern Italy (Trentino)
50€+tax – is the minimum hourly rate the BDG (professional association of German communication designers) suggests for recent graduates
60€ – This is the average hourly rate of product designers in the Netherlands
75€+tax – is the minimum hourly rate the BDG suggests for designers running a regular studio
80€ – This is the average hourly rate of communication designers in the Netherlands

Tools:
Stundensatzkalkulator BDG: http://bdg-kalkulator.de/
(hourly rate calculator – unfortunately only available in German)

How to establish your hourly rate?


 

If you know of any other tools helpful in calculating a fee, please let us know at: info (at) precaritypilot (dot) net

Last edit: 17.06.2014