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Setting an hourly rate

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Setting an hourly rate

1. 1. Setting an Hourly Rate A Quick Guide
2. 2. Why do you need an hourly rate?• So that you can quote accurately when looking for work• To ensure that you work for a worthwhile return• It assists with budgeting
3. 3. What you need What annual salary do youBe realistic in estimatinghow much time youll have want?for work. What are your goals?For example, ensure youallow for holidays, sick What is a realistic estimate ofdays, administration time,and non-work days. how many working days youMake sure you know your have?minimum needs to coverbusiness and living costs.
4. 4. The Calculation: Working Days• There are 52 weeks in the year with ﬁve working days each. Total: 260 days• Under Australian law, workers get 4 weeks of annual leave. That subtracts 20 days from the total leaving 240 days• Under Australian law, workers are entitled to 10 days of sick leave. That leaves 230 days• Youll need to allow for administration time to run your business. That will use about 20% of your time. That leaves 184 days• Lastly, you need to subtract public holidays. Thats another 10 days leaving 174 working days
5. 5. The Calculation: Earning Goals• I suggest setting three earning goals• The ﬁrst goal is survival - the minimum salary you need to keep the business aﬂoat and survive• The second goal covers business expenses and allows you to live comfortably• The third goal covers business expenses and allows you to enjoy some living luxury
6. 6. The Calculation: Setting RatesFor this, l going to set three earning goals of \$50000,\$75000 and \$100000 per year \$50000/year \$75000/year \$100000/year 174 days \$287/day \$431/day \$575/day 8 hours \$36/hour \$54/hour \$72/hour
7. 7. The Take-Away• Dont accept work or quote for work below your minimum hourly or daily rate. It might be hard to do that youll be better off putting your efforts towards better laying clients• Never be scared of charging your highest, aspirational rate