Tool #2: Calculating your minimum fee and your target fee

To make your practice viable, it is useful to rely not only on suggested fees, but also to calculate the minimum fee that would allow you to balance your living expenses, your overheads and your recurring daily costs as a practicing designer. Establishing this minimum allows you to know the rate below which you could not possibly survive, even with a constant flow of commissions.

You can calculate your target fee by establishing how much you want/need to earn in a year depending on the lifestyle you are aiming for: do you want to travel? Have kids? Have a house in five years? Want to have a secure pension down the line? As a reference for your desired annual income, you can relate to how much designers who are employed in a studio earn, or, equivalent to your practice, how much teachers, art mediators or researchers earn. Knowing both your minimum and your target income allows you to negotiate payment for different types of projects without compromising the overall viability of your practice.

Examples:
The Major Players 2012 salary survey worked out average national UK salaries for 2012 across a range of job titles in design and branding:
Junior designer: £21,000
Midweight designer: £30,000
Senior designer: £40,000
Design director: £55,000

Nota bene:
When your household income is below 60% of the median national household income, then – according to the OCED and the European Union – you are considered to be living below the poverty line. Here a few samples of average incomes (per person) in Europe:
Germany (2007): €27,083 (60% = €16,249.8)
Italy (2008): €18,873 (60% = €11,323.8)
United Kingdom (2004-2005): £22,800 (60% = £13,680)

Sources to follow up for more detailed explanations of how to individually calculate your fee:
• Calculate Design Fees by Marco W. Linke
• Design Kalkulieren von Marco W. Linke

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

• How much should I charge? by nuSchool

How to establish your hourly rate?

Last edit: 19.05.2014