Adapted with permission from Accurate Estimating by Michelle Boulton
There are different types of editing and not all editors get paid the same—add in the nuances of plain language editing, which include elements of structural, stylistic, and copyediting, and it can be hard to know what to charge for an hourly rate.
In this instalment, we show you how to calculate an hourly rate based on your annual income goal. Please don’t underprice your services – you want to charge a rate that is competitive for your clients, but also fair to you.
For demonstration purposes, we’ll be using $50,000 a year as an annual earning goal.
First, calculate how many hours you will work in a year:
8 hours a day × 5 days / week = 40 hours / week
40 hours / week × 52 weeks / year = 2,080 hours / year
Factor in paid leave:
15 vacation days + 10 statutory holidays + 5 sick days = 240 hours / year
2,080 − 240 = 1,840 working hours / year
Now divide your income goal by the number of working hours in a year to get your hourly rate.
$50,000 / year ÷ 1,840 working hours = $27.17 / hour
But wait! Don’t forget about benefits (e.g., extended medical and dental benefits, disability or life insurance, RRSP contributions). These typically cost employers an additional 30% for each employee.
$50,000 / year × 30% = $15,000 / year
$15,000 ÷ 1,840 working hours / year = $8.15 / hour
$27.17 / hour + $8.15 / hour = $35.32 / hour
Now, given that most editors are lucky to bill for 4 hours in an 8-hour day (assuming they spend the other 4 hours doing things like answering email, bookkeeping, filing, invoicing, marketing, and so on), you need to charge twice as much per hour to cover the half of each day that you are not able to bill for:
$35.32 × 2 = $70.64 per hour
Finally, if you’re self-employed, you have a lot of other expenses to cover (office space, equipment, supplies, and so on). These are going to vary depending on your situation, but don’t forget to factor these in when you set your hourly rate.
Looking for a simpler formula?
A savvy colleague (Wilfred Popoff) once shared this formula with me: desired annual income, divided by 1,000 potential billable hours, and multiplied by 1.5 to account for expenses.
$50,000 ÷ 1,000 × 1.5 = $75 / hour