Be a Boss Day 5: Pay Rate

This post is part of the Be a Boss series. To see more posts in this series, check out the list on this post. They’ll be linked as they are posted!

Pay rate is a tricky topic among freelancers. I know some writers who change as little as $5 for a 500-word article. Others wouldn’t dream of charging less than $200 for the same article. So who’s right?

As a writer, it is important to charge enough to make the salary you want. I highly recommend reading the article How to Set Salary Goals to learn more about calculating how much you must charge to pay your bills.

Image: sxc.hu

But that’s not the whole story if you want to be a freelance boss. It gets a little trickier in this case because you have to determine how much of a cut to give your writers and how much of a cut to give yourself.

It’s easy to take advantage of writers, especially those just starting out. I know companies that charge a client $50 for an article and pay their writers just $10 of that. a 20/80 split isn’t exactly what I’d call fair. In fact, even a 50/50 split isn’t really fair. If you have good writers, you should have to do minimal editing.

At the same time, you want to be paid for the work you do. You are the person trolling for jobs, handling problems, communicating with clients, and formatting articles. Your tush is on the line when there’s an issue, and it can be stressful to trust that other writers will turn in the work they’ve promised. Plus, you’re the boss. You’re management, so to speak. You’ve paid your dues as a writer and you’re running a business. You want to actually make more money than you could make by just being a writer!

I recommend a 60/40 or 70/30 split, depending on the work your writers do. As a writer myself, that seems fair to me, and as someone who’s also been a boss, 30% – 40% is also fair for the company’s owner. Remember to calculate this fee AFTER you take out banking fees, Elance fees, and editing fees (if you pay an editor). Otherwise, your cut of the money is going to be eaten up by other costs.

As for article rates that you charge…the jury’s still out. Make sure you charge what you’re worth though. When bidding for jobs, it is easy to be super competitive with pricing, but keep in mind that it weakens the entire market. We all need to come together as freelancers and demand fair payment for our work.

I’m opening the floor to questions how about being a freelance boss. Make sure to check out the other posts in this series. You can leave comments and questions on any of the posts or email me with your question. I’ll do a round-up post later this week to help answer all the questions!