How much should you be charging as a contractor?

Tuesday 5 December 2017

When you work for yourself, the question of how much you should be charging is always on your mind. You want to make sure you take home as much as possible, of course, but you also don't want to put off potential clients by being too expensive. But then on the other hand, if you price your services too cheaply prospects might assume you aren't very experienced or talented.

So how do you decide how much to charge? Well, one thing you can do is look at the average that people in your situation price their contracting services at. This will depend on your industry and the amount of experience you have, but luckily there is some data available that can help with this.

Hubstaff recently published its Global Freelancing Study for 2017, a survey of hundreds of self-employed workers from over 150 different countries. Among the data it collected was how much different types of contractors earn. Brits can be happy with the findings, as they topped the table of freelancing rates.

According to Hubstaff, UK freelancers charge an average of $46.54 (£34.39) per hour. This is the highest rate in the world; more than Canada ($40.17) and the US ($37.87). However, experience plays a major role in how much a contractor can charge.

In the marketing industry, for example, Hubstaff found that the average worldwide hourly rate was $24.87. However, most contractors in this sector won't be able to charge this straight away; those with two or fewer years of experience price their services at just $16.97 per hour, while those with less than five years' experience charge $21.80 per hour, on average.

In the IT sector, things are very similar. Developers with two or fewer years of experience charge an average hourly rate of $19.44, and those with five years or fewer charge $20.80. However, in both industries there is a large jump in pay the longer you have worked there.

In fact, developers with more than ten years' experience price their services at $40.36 per hour, on average, while marketers with the same amount of time in their industry charge an hourly rate of $52.15.

Of course, there are still a lot of variables surrounding this. You might not live in an area where there are many clients willing to pay you top dollar, for example. But information like this can help you come to a sensible decision about how much to charge.

If you're looking for advice on this subject, Brookson is a specialist accountant for contractors. You can book a consultation here to find out more about their services.

By Victoria McDonnell

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