The advancement of technology, and now the spread of COVID-19 triggering the world\u2019s largest work at home experiment, has freed us from the drudgeries of office work. <\/p>\n\n\n\n

No more over-bearing managers, no more traffic, and most importantly\u2026<\/p>\n\n\n\n

No more stolen lunches from the office fridge.<\/p>\n\n\n\n

All that said, the most intriguing part of remote work is that it allows people to get hired for jobs all over the world.<\/p>\n\n\n\n

You could be in Singapore coding websites for a UK-based company. You could be in New York writing copy for a Dubai-based hotel chain. <\/p>\n\n\n\n

The job opportunities are endless, which kind of complicates the income equation. <\/p>\n\n\n\n

In office-based jobs, an employer will have a set budget and you\u2019d negotiate your desired salary from there. <\/p>\n\n\n\n

Remote jobs aren\u2019t as clear cut. <\/p>\n\n\n\n

This guide will show you all the factors to consider when deciding your target hourly pay, and the different pricing structures you can use as a remote worker.<\/p>\n\n\n\n

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  Consider This When Learning How to Calculate Your Rate<\/h2>\n\n\n\n

  1. Field of Work <\/h3>\n\n\n\n

  Payoneer\u2019s 2020 survey<\/a> showed that project managers earned an average of $28 per hour, while professionals in sales earned $25\/hour, and administrative jobs paid about $10 per hour. <\/p>\n\n\n\n

  The more difficult and technical your job is, the higher your potential salary. You can base your target hourly pay based on the average salary for your job.<\/p>\n\n\n\n

  2. Seniority<\/h3>\n\n\n\n

  Your position, whether you’re an individual contributor or a manager, also affects your pay as a remote employee.<\/p>\n\n\n\n

  Companies not used to working remotely, for instance, are now in desperate need of leaders who can coach and manage teams online. <\/p>\n\n\n\n

  Like regular office-based jobs, your rates will also be influenced by how many years you\u2019ve been on the job. Companies want remote employees who can do their tasks without too much hand-holding, so they\u2019re willing to pay more for someone with experience.<\/p>\n\n\n\n

  3. Location<\/h3>\n\n\n\n

  Remote jobs in India won\u2019t pay as much as remote jobs in the UK, that\u2019s just the unfortunate truth. The employer\u2019s location or the location of the employees they\u2019re targeting, will also affect the job salary. Consider these two factors when calculating your target hourly pay. <\/p>\n\n\n\n

  Related Read<\/strong>: 55 Resume Tips, Hacks & Expert Advice to Help You Score a Job Interview<\/a><\/p>\n\n\n\n

  4. Expenses<\/h3>\n\n\n\n

  As a remote employee, you will now be responsible for the costs your employer previously paid or covered on your behalf. <\/p>\n\n\n\n

  These include but aren\u2019t limited to:<\/strong><\/p>\n\n\n\n

  • Your equipment: laptop or computer, and office space<\/li>
  • Living expenses: rent or mortgage, food, and utilities<\/li>
  • Software and other subscriptions<\/li>
  • Internet and mobile services<\/li>
  • Insurance and taxes<\/li>
  • Leaves: sick leave, emergency leave, and holiday leave<\/li>
  • Training and up-skilling<\/li>
  • Retirement and stock purchases<\/li><\/ul>\n\n\n\n

    Of course, you have to earn a profit too so don\u2019t forget that when calculating your target hourly pay. Otherwise, you\u2019ll just break even and won\u2019t have anything left over for personal expenses. <\/p>\n\n\n\n

    You also have to consider future expenses, like having a child, getting married, or adopting a pet. Consider the lifestyle you want to live and factor it in whenever someone asks what are your salary expectations.<\/p>\n\n\n\n

    5 Different Pricing Structures to Explore (If You Want to Earn More)<\/h2>\n\n\n\n

    The factors listed above are a great place to start when determining how to calculate your hourly rate and how much your services will cost at a minimum. <\/p>\n\n\n\n

    Now let\u2019s move on to the next step: the different ways you can price your services. <\/p>\n\n\n\n

    1. Salary or Monthly Pay<\/h3>\n\n\n\n

    If you were previously employed full-time, this is probably the easiest pricing structure to adapt. <\/p>\n\n\n\n

    Careful though, you shouldn\u2019t fall into the trap of asking for the same salary you earned in your last job. Remember the overhead expenses listed above?<\/p>\n\n\n\n

    Here\u2019s what to do when a recruiter asks what are your salary expectations for a remote job:<\/strong><\/p>\n\n\n\n

    • Cost plus profit: <\/strong>Sum up how much you want to earn plus the expenses your employer used to pay on your behalf, like taxes, internet, hardware, software subscription, healthcare insurance<\/a>, and leaves.\u00a0<\/li>
    • Market rate:<\/strong> Check what other remote workers within your field, location, and experience level are earning. Sites like Glassdoor<\/a>, Payscale<\/a>, and Salary.com<\/a> are excellent sources for this.<\/li><\/ul>\n\n\n\n

      Related Read<\/strong>: 10+ Job Search Tips & Tricks to Up Your Chances of Landing an Interview<\/a><\/p>\n\n\n\n

      2. Hourly Rate<\/h3>\n\n\n\n

      Many remote workers are paid per hour for two reasons: <\/p>\n\n\n\n

      • It\u2019s the most commonly used pricing structure in job markets like Upwork, Guru, or PeoplePerHour.<\/li>
      • It gives people the flexibility to work when they want and bill only for the hours consumed to complete a task.<\/li><\/ul>\n\n\n\n

        This is one of the easiest ways for remote workers to calculate their target hourly pay. This pricing structure allows you to get full compensation for all the time you work, even if a project takes longer than expected. <\/p>\n\n\n\n

        The worst mistake you can make when calculating your target hourly pay is assuming all your hours are billable. You can\u2019t just take your current monthly salary and divide that number by four weeks and a further eight hours per day of work. <\/p>\n\n\n\n

        Your employer won\u2019t like getting billed for meetings, emails, invoicing, and your lunch breaks. <\/p>\n\n\n\n

        Did you know there\u2019s a study that states an average employee is only productive for three out of the eight office hours per day<\/a>? Imagine how much less you\u2019d earn if you only billed for three hours per day! <\/p>\n\n\n\n

        Now I\u2019m not saying you should cheat by billing for eight hours when you only worked three.<\/p>\n\n\n\n

        Instead, you should learn how to calculate your hourly rate in a way that incorporates your admin and other non billable hours into the computation.<\/p>\n\n\n\n

        Here\u2019s a simple equation to calculate your target hourly pay:<\/p>\n\n\n\n

        (Expenses + Desired Profit) = X * (30 hours x 48 weeks)<\/p>\n\n\n\n

        The formula above assumes the following conditions but you can adjust it for your lifestyle:<\/p>\n\n\n\n

        • 30 hours productive work per week, 10 hours on admin and non-billable time<\/li>
        • 48 weeks of work out of 52 weeks in a year, which means you have 4 weeks or one month of vacation<\/li><\/ul>\n\n\n\n

          Let\u2019s plug in some numbers to see how it works.<\/p>\n\n\n\n

          Let\u2019s say you want to earn the same amount you were earning in your corporate job ($45,000) so that\u2019s your profit. For utilities and other overhead expenses, let\u2019s just assume a round $15,000. <\/p>\n\n\n\n

          Here\u2019s how to calculate your hourly rate using the same conditions above:<\/strong><\/p>\n\n\n\n

          ($15,000 + $45,000) = X * (30 hours * 48 weeks)<\/p>\n\n\n\n

          You will get:<\/p>\n\n\n\n

          ($60,000) = X * (1440 hours)<\/p>\n\n\n\n

          $60,000 \/ 1440 hours = $41.66<\/p>\n\n\n\n

          The rate above already includes your vacation time, non billable hours, expenses, and some profit that you can use for your personal expenses and leisure.<\/p>\n\n\n\n

          Keep in mind that you can always increase your rates as you gain more experience working remotely, or as you take on more projects. <\/p>\n\n\n\n

          3. Fixed Rate or Project Rate<\/h3>\n\n\n\n

          Fixed or project rate quotes work better than other types of pricing because it gives you the freedom to earn a fixed fee regardless of how long it takes to finish a task. It\u2019s also an easier sell for many clients because they know upfront how much a task will cost.<\/p>\n\n\n\n

          Using this pricing structure, however, means you won\u2019t be basing your earnings on a target hourly pay. <\/p>\n\n\n\n

          You will also leave the arena of traditional employment. Once a project is done, you have to find another one. You\u2019re not earning a monthly salary. It\u2019s not all bad though. Given the right strategy, there are many upsides to this pricing structure.<\/p>\n\n\n\n

          If you\u2019re an expert and efficient worker in your field, you can complete a task in less than the expected timeframe and still get a high fee. <\/p>\n\n\n\n

          Jake Gorgovan<\/a> started with a target hourly pay of $30 per hour as a website designer. After building his portfolio and improving his skills, he increased his rates to $60 per hour. <\/p>\n\n\n\n

          But by that time, he was so efficient at what he did that he could complete a project in three hours. At $60 per hour, one website project he got on UpWork earned him a measly $180. Of course, his client was happy to get a beautiful site for such a bargain. But that\u2019s when Gorgovan realized how hourly billing limited his income. <\/p>\n\n\n\n

          A month later, he booked a design project. This time for $4,250\u2014 a huge increase compared to the previous $180 bargain but it still only took him 5 hours to complete. <\/p>\n\n\n\n

          You see, many businesses don\u2019t care how long it takes you to complete a task. Keep this in mind next time you\u2019re asked what are your salary expectations. All they care about is you do the job right and on time. <\/p>\n\n\n\n

          If your job and skillset doesn\u2019t require you to be always available, a project based pricing structure can help you earn more without an 8 to 5 time commitment. Fixed rate pricing models are great for creatives, IT professionals, and project managers.<\/p>\n\n\n\n

          Related Read<\/strong>: 10 Cover Letter Tips & Tricks Sure to Score Job Interviews [2020 Ed.]<\/a><\/p>\n\n\n\n

          4. Retainer Fees<\/h3>\n\n\n\n

          Retainer fees are great for professionals that have a come and go workflow. IT support professionals and designers are great examples of this because unless they work for a big company, they won\u2019t have much to do after the initial setup of a website or network system. <\/p>\n\n\n\n

          They might be needed in case the system goes down, or a new web page needs to be designed and uploaded. But it\u2019s not steady enough to warrant a full-time arrangement.<\/p>\n\n\n\n

          A retainer arrangement is better for this setup compared to billing based on a target hourly pay for two reasons:<\/strong><\/p>\n\n\n\n

          • An employer can count on you to be available for a set amount of hours every month, so that gives them peace of mind. It\u2019s like having a lawyer or doctor on call.<\/li>
          • You invoice a client for a set fee every month, whether or not they request your services.<\/li><\/ul>\n\n\n\n

            Keep in mind, however, that clients pay for retainer fees to ensure you will be there when they need it. So you can\u2019t overbook yourself and say sorry when your client comes calling. <\/p>\n\n\n\n

            On the flip side, you also shouldn\u2019t feel guilty if your client doesn\u2019t use the hours they paid. It\u2019s like a gym membership fee\u2014 they won\u2019t give a refund if you don\u2019t go. <\/p>\n\n\n\n

            5. Rate Per Word<\/h3>\n\n\n\n

            Some magazines and agencies pay writers per word. Top national magazines, for instance, can pay as much as $2 per word. Content mills, on the other hand, can pay as low as $0.001 per word. <\/p>\n\n\n\n

            Not many employers will like this arrangement though because it makes budget planning harder. Just imagine invoicing from their point of view– sometimes they\u2019ll pay for 1200 words, sometimes it\u2019s 453 words. It\u2019s an accounting nightmare. <\/p>\n\n\n\n

            Experiment with Different Pricing Models<\/h2>\n\n\n\n

            Whatever target hourly pay and pricing model you start with, know that it doesn\u2019t have to be that way forever. <\/p>\n\n\n\n

            Feel free to change it as you learn more, change roles, want to earn more, or just when you feel like it. As a remote worker, you\u2019re no longer confined to the traditional systems of office based work.<\/p>\n\n\n\n

            Related Read<\/strong>: 25 Best Apps for College Students: Productivity, Studying, Learning & More<\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

            Are you planning on starting a job as a self-employed contractor or freelance worker? This guide explains how to calculate your rate right!<\/p>\n","protected":false},"author":9,"featured_media":1420,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[41],"tags":[44,85,48,87,86],"acf":[],"yoast_head":"\n