Coming up with an hourly rate as an independent worker isn’t as simple as it seems. There’s much more to it than deciding how much your services are worth. You need a rate that not only attracts customers, but also earns you a liveable salary. A rate that’s both competitive and fair.
Finding the right balance
Here in BC, the hourly rate debate is a challenge facing more workers than elsewhere in Canada. The province is fast becoming a model for self-employment, hosting one of the largest proportions of independent workers in Canada. A new Vancity report has found the majority of independent workers prefer contracts and short-term “gigs” over traditional, full-time jobs.
While there are some obvious perks to self-employment – like setting your own hours and choosing which jobs to take – there are a number of drawbacks as well. Work can be unpredictable and unstable, there’s no employer paying out your health and vacation benefits, and coming up with an hourly rate that works for you and your clientele is no easy feat.
Helpful tools and services
That’s where the Urban Worker Project is stepping in to help. Based in Toronto, the organization is working to build a stronger voice for independent workers by giving them access to helpful tools and services. One of these tools is their very own salary to hourly rate calculator, which guides freelancers through everything they should include when coming up with an hourly rate.
“Too often, for independent workers, we don’t take into account things like health benefits, life insurance, CPP (Canada Pension Plan), or vacation and sick days,” explains Andrew Cash, co-founder of the Urban Worker Project. “There’s also all sorts of unpaid work that independent workers do.”
You start by inputting the annual gross salary you hope to make, include rough numbers for your benefits, expenses, non-billable hours, and paid time off, and the calculator gives you a suggested hourly rate.
“I was surprised that what the calculator suggested for me was higher than what I already charge,” remarked Nicole Obre, a freelance writer. “Even though I usually budget for things like vacation time and hours I can’t invoice, I hadn’t really considered building them into my rate. It was definitely an eye opener.”
A great starting point
While Cash noted that the calculator can’t possibly include everything that applies to the different fields of independent workers, at the very least it gives you a ballpark figure and a starting point.
And the suggested numbers for each category are just that – suggestions. It’s important to think about a number of different things when deciding how much you should be setting aside for expenses, like what city you live in, how much vacation time you plan to take, and what your retirement goals are. And ultimately your hourly rate also needs to reflect your skills and experience in your field, as well as the needs of your clients and current market rates.
At a minimum, your hourly rate should meet the living wage standard in your region. A living wage is a calculation of the hourly amount a family needs to cover basic expenses. Some of the current living wage rates are:
- Metro Vancouver: $20.91/hour
- Fraser Valley: $17.40/hour
- Victoria: $20.50/hour
The Urban Worker Project has a wealth of great resources and information to help you figure out how to balance all those factors to find just the right hourly rate for YOU.
