If you’ve ever done freelance video work, you’ve probably had the same dilemma as I have: how much should I charge? and should I charge an hourly, day, or fixed project rate? I’m going to try to help you decide what the best option is for you. This goes for any type of freelance work – not only video work. First let’s explain the different types of rates:
Now that you know how the different rates work, let’s break them into two main categories. Charging an hourly rate or a day rate is similar because you are charging based directly on time that you work. When charging a project fee, you are estimating how long you will work on a project – but you are really charging for the end result. This means that if you work overtime, you’re not going to get paid for it.*
The Case for Charging an Hourly Rate
- As a freelancer, charging an hourly rate is great. You are guaranteed to be for every extra minute that you work. I really like charging an hourly rate because I can feel confident that I’m not spending ‘too much time’ on a project that might not need as much work.
- It is hard to estimate exactly how long the project will take you. And as a freelancer, I know that some projects end up taking a lot longer than expected. Charging an hourly rate gives you the freedom-from-worry of an endless project that changes scope.
- Being locked in to a project fee gives the client too much power to change the scope of a project. The client will really understand that time is money, and that they can’t waste your time with ‘tests’ and ‘versions.’
The Case for Charging a Fixed Rate
- Charging a fixed rate guarantees a certain amount of money. If you charge an hourly rate, the client may decide to cancel in the middle of a project. Or you might finish the project quicker than you expected. Either way, if you have a fixed fee, you know you’ll at least make a certain amount of money for the project.
- Working for an hourly fee creates laziness and slow work. It’d be a lie if I said that when I charge an hourly rate that I worked as hard as I could for every 60 minutes of every hour. When I am getting a fixed fee, I want to finish the project as quickly as possible. And to be honest, it makes me work harder.
- Charging a premium hourly rate seems really expensive to the client.. Especially Saying that your hourly rate is $80 can be hard to swallow. But what the client doesn’t understand is that 30%+ of that goes to taxes; you’re paying for your own equipment; you don’t get any vacation or retirement benefits. But if you charge $800 for a video project that takes you 10 hours, you’ve effectively charged an $80/hour rate. To me, $800 for a video seems like a lot better deal than paying someone $80/hour and not knowing how long it will take them.
*Depending on the contract, you can charge for overtime if it’s at the fault of the person hiring you. For example, when I do video projects, we typically give them two rounds of edits – after the initial cut & after the fine cut. If they come back with more notes once we provide the ‘final cut,’ we will charge them a fee due to them not following the process we laid out to them when they hired us.
So what way should you charge?
To be honest, I think it depends on the type of project. I’ll use video production as an example because it’s what I’ve done most of my freelance work in. But you can insert your own type of work. Here are some examples:
Editing a documentary takes a long… I mean loooonnnngggg time. There are more rounds of edits than editing a narrative or commercial project. And depending on who the director is, you might spend many many hours re-editing things that will be changed later.
So in this case CHARGE BY THE HOUR. You don’t want to get caught editing a feature length documentary for a fixed price. For big extended projects that will take more than a week or two to edit, I would charge an hourly or day rate.
Videography / Cinematography / Other Set Work:
When you are trying to do production work, it’s always best to CHARGE A DAY RATE. Some days you’ll end up putting in extra hours. Some days you’ll only be hired for a two hour shoot. I think it is best to always charge a day rate for production days.
It’s not worth it to go shoot a one hour event, and only get paid for an hour of work. I know people who won’t go out on a shoot for less than $500. For projects/work that will be completed in one day or on a daily basis, charge a full day rate.
Commercial Videos /Business Promotions:
As a new video creator, a lot of your work will come from commercial work. Examples of this could include an actual commercial for a business, an internal video for a company, or an online tutorial or other type of video for another company. For these types of projects as a solo-videographer or the person in charge, I think it’s best to CHARGE A PROJECT FEE.
Businesses like to see how much a project will cost from the beginning. Typically they’ll have you submit a ‘bid’ for a project that details the work you’ll be doing and how much you will charge. So if a company comes to you asking to make a 2-minute promo video for their new product, it’s best to give them a full project fee, rather than an hourly rate. For projects that seem self-contained (not a big documentary/film project or an on-going gig), I like to charge a one-time fee.
What do you think?
How do you charge as a freelancer? What other things should people keep in mind. Please let me know in the comments below!