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I'm currently looking at new W2 positions that make around $80,000. According to http://www.rate-calculators.com/ -- I should be making $50/hr as a 1099. What's the best way to tell the recruiter this?

Do I say, "I would need a minimum of $50/hr?" or do I give them more of a loose "I am looking for around $55/hr"?

I'm used to giving numbers for annual W2 salaries, but I've never done this before. Just wondering what the recruiter would be expecting to hear from a contractor, if that makes sense. Do they want a hard number? Or do I give a loose range?

  • Possible duplicate of How do I calculate pay rate if I've never freelanced before? – Scott Jun 8 '16 at 5:54
  • I usually give a hard number. "My rate is $60/hour". Usually my rate goes up $2/hour each client. So (for example), first would be $50, then next is $52, and so on. Until someone doesn't want to pay that amount anymore. I don't use a recruiter, though, so YMMV. – user152 Jun 8 '16 at 9:00
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    I'm not convinced this is a duplicate. That question is "how do I work out the number" and this one is more "how do I tell them the number?". There may be a duplicate of this out there but I can't find it. – user152 Jun 8 '16 at 9:10
  • I just looked at the rate calculator you linked to and there are a few things it does not take into consideration: – Emily Jun 8 '16 at 21:54
  • Sorry - I pressed enter too soon ^^^ 1. You probably won't be 100% booked. 2. You don't get paid for time spent interviewing, bookeeping, etc. (running your business). 3. No mention of retirement benefits. 4. If in the US, you have to pay a brutal extra 8% self employment tax on business income. I think you need to charge more than $50 an hour to clear 80K of W2 income. I would try to find out what your competitors charge. You might offer the recruiter a discounted rate for larger/longer projects. – Emily Jun 8 '16 at 22:05
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I always provide a hard number and never a range - but that comes down to my weakness as a haggler. Instead I prefer more or less stating a price as an ultimatum. When I quote a range, I feel I seem less confident and therefore vulnerable to being bullied. So I try to do the 'bullying' myself.

Generally, I try to postpone giving a price quote as much as possible. If the initial contact and meetings go well, the client may be willing to pay more than they initially would. Clients hire a freelancer's skill-set, but the personality and other softer skills are often what ultimately makes or breaks a deal - so if your soft skills are an asset, postponing pricing until you have demonstrated them will only be in your favor.

When it comes to how I tell them the price, I simply state 'my price is $XXX/hour'; not 'I'm looking for...' or 'my target is ...'

When/if potential clients are a bit taken aback at the price, I simply state that this is what other satisfied customers have paid.

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There's no hard and fast rule about this in my experience.

Some freelancers like to play it loose and ambiguous with dollar amounts. My opinion is this is often done for three reasons: A) They want to be able to "feel" the client out in case they can get more money from them or B) they aren't confident enough and are too scared of losing a job due to pricing and C) they feel it may convey an attitude of willingness to compromise or an overall lax attitude. -- Again, just my opinion. And I'm not stating these are all wrong, they just aren't the way I do business. I've seen many the freelancer state things like "Just pay me what you think it's worth." That's all well and good if you aren't really concerned with how much money you are earning or don't feel your time is of value. But to me.... I really need to be paid if I'm spending my time and experience to assist a client in making money for themselves.

Working this way greatly escalates the chances of you not being paid, or being underpaid. Sure you may be seen as a "nice guy/gal" but which is more important - earning a living or being seen as "nice"? If there's no solid, agreed upon figure, there will be arguments and disagreements about what you are worth. If you can afford to just walk away from any job without payment, or file lawsuits to get your payment, then okay. Most don't have the time, patience or resources to actually survive this way.

This is like working at Taco Bell and not worrying about getting a paycheck. Taco Bell makes money either way -- if they don't have to pay you, they'll be more than happy to take your free or reduce wage services. Why would you not want to be paid?

I provide hard, solid, numbers when asked what my hourly rate is.

When I'm asked what my hourly rate is, I provide my hourly rate. Period. I don't waffle. I'm not ambiguous about how much I expect the client to pay me. I want no misunderstanding. The client needs to be fully aware that if they want me to do X, they are expected to pay $X.

On top of that, I do not alter my pricing just because a client feels my pricing is unjustified (to them). Clients have no idea what my overhead is and what my expenses are. Therefore a client is never in a position to tell me what I should earn. Ever. I don't care what they've paid in the past. I don't care what they think is acceptable. I've set my rates. Pay them or move on.

Related questions:

https://graphicdesign.stackexchange.com/questions/25712/what-should-i-do-if-a-potential-client-claims-my-pricing-is-too-high/25713#25713

Whose responsibility is to give budget for job: Freelancer or Client

How much should I charge for graphic design and how?

As a freelancer how do you quote/charge for a project?

Client wants to pay a percentage of revenue generated by website

Underestimated project: Do you charge the excess time?

How to politely turn down a client's request for a free test job?

How to negotiate a price after an item of work is done?

There are a ton of questions here regarding pricing and client relations. It may help to just search and review other questions/answers.

Below is only added because you used the word "recruiter" rather than "client"

Regarding the "recruiter" -- be careful. Just my experience, but if this person is looking to use you and be essentially your "agent" -- as in they go out get work, you complete the work then you pay them for finding the work -- you need to seriously negotiate compensation and how payments are structured.

I've seen several instances where a "recruiter" would refer a client to me, then expect me to write them a check for a percentage of the project - a "kickback" essentially. This is done all the time but it is often ethically questionable because it is so easy to raise rates to clients in order to compensate for the kickback -- and often that is the case. In addition, when you start writing checks for this type of thing it can have a detrimental effect on how you feel about freelancing. It's no fun shelling out money for completing your work. It just feels backwards (because it is).

On the other hand, there are "recruiters" that go out, find the work, come to you to complete the work, then they bill the client and they write you a check for the services -- you don't get payment directly from the client. You get payment from the "recruiter". Essentially you become and "invisible" resource for them. This is very common and generally not a problem. In fact, I've worked this way with some clients for years. However, you need to ensure (via a contract) that if the "recruiter's" client doesn't pay the "recruiter" then you still get paid. Don't allow your payment to be dependent upon the recruiter's payment. Get a contract in place that states every project the recruiter asks you to complete, the recruiter is responsible to pay for.

Note according to the rate calculator you linked to, I'd be a baz-illionaire by now - those figures seem exceptionally unconventional to me. Without any explanation as to how the values are being calculated, I would not put any stock in what that link states.

According to that link, Based on my last W2 position (more than 10 years ago) I should be charging more than 4 times what I currently charge... I'd starve because no one would hire me as a freelancer at that rate. If I were to go back to W2 employment, based on my current earnings... well.. I'd never find any position paying that much.

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