Business

How to charge for freelance work? Hourly, Day, or Fixed Project Rate

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:

Hourly Rate

You are paid per hour of work. For example, if you charge $40/hour and work 8 hours in a day, you’ll make $320 that day.

Day Rate

You are paid by the day, no matter how many hours you work. For example, you charge a flat $400 day rate.

Project Rate

You charge a fee for the entire project. No matter how many hours or days it takes you, you make one amount. For example, you charge $4,000 to edit a commercial.

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:

Documentary Editing:

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!

Cheers,
Phil

Phil Ebiner

My passion is inspiring people through online courses. I love learning new skills, and since 2012 have been teaching people like you everything I know. Through my online learning business, Video School Online, I create courses that teach you how to become the better version of yourself with all kinds of skills.

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View Comments

Genuine Jobs says:

May 21, 2015 at 6:04 am

AS far as I've noticed, some clients prefer a fixed rate since most of them are afraid of getting ripped of. Every type of charging has it's pros and cons. It really comes down to calculations. So, when it comes to setting up your rates, the best option would be taking a pen and paper and doing the math.
- Phil Ebiner says:
  
  May 22, 2015 at 9:53 am
  
  This is totally true! Thanks!
Risky Pathak says:

April 7, 2016 at 7:01 am

A programmer(like me) trusts hourly rate more than fixed price project. The reasons are below
1. We never know that what obstacle(programming hurdle) we can face while working on project. And 90% of time estimates overbursts. Hourly charges make as calm even if we are struck.
2. If we are into big project, then there are lots of requirement changes in between project phases. If project price is fixed, then lots of discussion with client for imcreasing price.
3. As in programming you can do same thing with utmost quality and degraded quality. If project is fixed price, then AIM is to complete it asap and thus hampering quality most of times.
- Phil Ebiner says:
  
  April 7, 2016 at 9:14 am
  
  Those are some great points! I can imagine programming projects going on and on past the estimate.
Greg Montemurro says:

August 31, 2016 at 10:06 am

Yes agree, a fixed rate for a day, but I also will consider a half day rate to regular clients. usually 60% or more of day rate
You are right, it is not worth time to go out and get paid for one/two hours. You don't just show up to work. People don't understand the time involved prior, packing gear, testing it out, loading up, driving/ unloading. Often at the very least it is 4 hrs time , especially here in LA with traffic. And you can not book another day if you get a better offer.
- Phil Ebiner says:
  
  September 1, 2016 at 10:04 am
  
  Great thoughts! Thanks for sharing!
Hayley says:

November 30, 2016 at 2:54 pm

I'm not sure how much to actually charge as a fixed fee. The video is about 2 min and for a company showing their product. Is there an average range I should keep in mind?
- Phil Ebiner says:
  
  November 30, 2016 at 3:10 pm
  
  Hi Hayley, it really depends on a lot of things. How experienced are you? Where do you live? How big is the company? What is in the video (how much do you have to shoot)? What graphics, music, etc do you have to create or purchase?
  
  For me, a 2-minute corporate video like this could be anywhere from 1,000 - 5,000+. When I was starting out, I would probably do it for $200 if it was an easy shoot and I could shoot/edit it in a couple days. That way you can start building your portfolio.
  - Hayley says:
    
    November 30, 2016 at 3:26 pm
    
    I live in California and I have less than a year of professional experience. The first video was $250, but I want to verify any sort of range for future videos I make for this client. Thank you so much for such a fast reply!
    - Phil Ebiner says:
      
      November 30, 2016 at 3:28 pm
      
      Totally! Base it off your previous project. Was $250 worth it? Or do you need to charge more? It's totally fine to start in that lower range, but make sure you don't get stuck making videos on a tight budget for a long period of time.
Jessica says:

March 7, 2017 at 7:55 am

I'm not sure how to charge for just editing a video. It's a 4 hour training video that has already been edited, but they would like to hire me to make it come to life (basically just adding text and making it more interesting). I am still a beginner so I'm not sure how to charge. Please help!
Brennan says:

March 25, 2017 at 9:42 am

I like your straightforward approach. When you write up an invoice, do you put in categories equipment, labor, and your film crew's hourly rate? I have a 2 minute interview shoot for a business. Thanks!
- Ross Griffin says:
  
  June 2, 2017 at 10:22 am
  
  I know this might be a bit late but when doing invoices it's a good idea to list literally everything that has an expense. This way if there is a dispute further down the road both the customer and you have a copy showing that they were in fact aware that they were paying for said expense.
  - Phil Ebiner says:
    
    June 5, 2017 at 7:36 am
    
    That's a great point Ross!
Shadi Albek says:

October 2, 2017 at 11:42 am

hello ... I need to know : How much should I charge for editing a video press report 2min ??
- Phil Ebiner says:
  
  October 2, 2017 at 11:53 am
  
  It really depends on what your experience is and what goes into editing the press report, and also how long it will take you. I charge between $50 - $100 per hour of work nowadays. But when starting, it was closer to $15 - $25.
Rhys Hinkson says:

October 22, 2017 at 3:50 am

Does anyone have any recommendations for freelance web development with regards to payment?
Kerry Barber says:

January 29, 2018 at 11:30 am

How about making a 10 - 15 minute documentary, from start to finish, how much would you charge for that? They have archival footage, that isn't organized as well.
- Phil Ebiner says:
  
  January 29, 2018 at 11:55 am
  
  Oooh, that's tricky. It depends on how much you will be filming yourself, if you're going to have to hire someone for voice overs, if you need to purchase stock music, and so many other factors. It also depends on if you're just starting out or if you have a ton of experience.
  
  So it's hard to answer that question. A 10-15 min doc could be $5,000 if it's just editing a bunch of archival footage together simply with a voice over... or it could be $30,000+ if you're going on shoots, doing a bunch of additional work... or more or less :P
  
  I know that's not a great answer, but I'd need to know more info on how much time it's going to take and what you are responsible for doing.
  - Kerry Barber says:
    
    January 29, 2018 at 12:50 pm
    
    It's a commemorative event, lots of archival photos, and some interviews I'll have to shoot and i'll probably do the voice-over and then using songs from their selection.