Setting Rates

for editorial freelancers, but useful for publishers to read

All rights reserved. For permission to reprint contact Dan Connolly
Copyright © 2000 by Dan Connolly

Rate-setting for editorial freelancers is complicated. It's not as easy as picking a number out of a hat. Nor is rate-setting restricted to hourly rates (there are numerous project rates to consider as well).

When determining what to set for a rate, you have to take into consideration variables such as overhead, insurance, retirement, vacations, sick time, 20-yr. variable annuities rates' and whether it's a full moon or not. No, I'm kidding, you don't need to take the annuities into account. But everything else is of great importance.

Okay, freelancers have the same needs as other Americans. They need to provide their own benefits, pay their own taxes and squeeze in vacations when they can. Let's look at what the issues are that go into pricing. First, there are the things that cost money (this is not an exhaustive list, by any means):

Then, there are the items that cost time (and time = money):

Let's look at how much time is available in any given year to produce income. There are 365 days. Subtract 104 weekend days, 12 holidays, 10 vacation days and 10 sick days. That leaves 229 working days if all goes well. At 7 hours per day (don't forget that lunch hour and the fact that most freelance work like indexing is very concentration-intensive), that's 1,603 hours. In order to maintain a freelancing business, fully 20% of your time will be consumed by marketing, accounting, website redesign, and other administrative duties. That leaves 1,283 hours. Okay. Will you be busy during all of that time? Will you have a project in front of you every working day of the year? Perhaps not; scheduling a full load of work, day-in, day-out is difficult to achieve. Take 10% off for down time. That's 1,155 hours.

Now, let's say that you want to make $40,000 per year. That doesn't seem too greedy, does it? You'd have to bill those 1,155 hours at $35/hr. in order to succeed at making $40,000. Okay. How about if you want to make $60,000 per year? $52/hr. Remember that these numbers are gross numbers. If you make $40,000 per year, you can give at least 40% of it to the government (remember that you must pay both the employee and employer share of FICA). Okay, that leaves you with $24,000. Those rates don't seem so exorbitant after all.

Unlike copyeditors and proofreaders, indexers usually work for project rates. That is, they charge by the project, not by the hour. This usually takes the form of page rates (although there are other methods available, such as per entry or per book). All this means is that there is an extra level to the calculations, and there's no certainty about any of it. A 300-pg. book at $4/pg. will yield $1200. If that job took 60 hours, then you made $20/hr. IF you want to make $35/hr., then you need to complete that index in 34 hours (9 pgs/hr.) Can you do it? Well, that depends on the book, doesn't it? And every book is different. Sometimes, it's a crap-shoot. you'll end up on one side or the other of that magic number with each job.

One last item: Publishers who offer extraordinarily low rates to indexers need to understand these dynamics. Let's say you're an indexer who's offered a 300-pg. book at $1.75/pg. (not unheard of) that will probably yield about $10-$12/hr. (if done in 40 hours or so). Is that any way for a talented professional to be compensated for providing a necessary and often-rare skill? I think not.