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Here’s my formula to figure out full-time from freelance, you can reverse it for your day rate.
FTE = [(Freelance day rate * 5) x 52] - [(Day rate * 5) x 10]
So, if your day rate is $1k...
FTE = [(1000 * 5) x 52] - [(1000 * 5) x 10]
FTE = 260000 - 50000
FTE = 210,000
I use this as a rough guide in negotiations. This number always winds up a little higher than I’ve actually landed, but because you have a methodology, people are much more constrained in trying to negotiate with you.
Best piece of advice I ever got in this industry was: if people aren’t fighting you on your rate, then you’re charging too little. See where the price sensitivity is.
Rates are dropping dramatically. I’m now getting a day rate as a CD that I did as a Sr CW a decade ago. I’ve kept winning awards. I just was asked by a recruiter if I would take $50/hr for a freelance gig. Now the gig is just for concerting and writing but I know mid levels that get $75 an hour.
I’d suggest a dayrate of $1,150. Here’s how I got there:
Base plus 30% because now you need to cover your own benefits; dental, eye, medical, IRA, etc.
Divided by 45 wks (between holidays, vacation and sick days, you typically don’t work 52 weeks, but obviously need to be financially covered.
Took that amount and divided by 5 and there you have a day rate.
Some may not agree with this way of thinking, but it’s worked for me. Hope it helps!
Thank you! That is very helpful! And your logic makes sense to me.
Super helpful comments and advice, everyone!
Just got approved at $2,000/day for a 6 week gig. My first freelance job.
(My on staff salary at different but comparable company was $200k annual plus discretionary bonus and the usual benefits).
NICE! I wish I’d seen this before I wrote my overly long advice column to you. You’ve clearly got this. Have fun on this roller coaster! It’s well worth the ride.
Thank you SD1 for the siftly reco. I looked it up. Here’s a link in case useful for anyone else. https://www.docdroid.net/CTYNnhj/siftly-strategy-salary-survey.pdf#page=26
One of the slides on freelance rates.
If it helps the last time I was full time (a few years ago) I made $240K+ bonus. Depending on the amount of time, pain and task my day rate is up to $2200 and no lower than $1700. I’ve got a few more years experience than you and a head of planning stint under my belt. A lot of clients freak out once you’re over $2K but I have an old colleague who charges an executive rate of $3000/day. This person is very experienced and tends to do a lot of innovation work, not just marketing.
Totally agree with this. My rate has gone from $1450 - $2,000+ in a short period
Ignore me then!!! These rates are better/higher, apparently I’ve been lowballing. Good to know! I have 17 years Account experience in NYC.
Raise your rates! 🙌
Here’s the thing; you will absolutely not work 52 weeks a year, so any formula that assumes that will leave you underpaid. You will want a rate that will keep you from starving during the lean months.
I realize that rates vary from city to city, but I think that $50-75/hour is a sin. It’s not even worth taking. And once you start taking that low ball rate, not only will YOU get relegated to that lower scale, but you’ll provide ammunition for clients to justify paying others lower rates. Don’t make that mistake. The consequences will be long lasting.
I am a producer so I don’t assume that rates in my department will be the same as creative department or account department. That said, most people at your level, in my city, are making $1200-$1600 a day. That translates to a minimum of $150 an hour. I would always start the conversation asking for the highest rate you can say with a straight face. It’s rare that you’ll lose a gig due to being fancy...at least not without a discussion. If you’re finding that every client accepts your suggested day rate without question, you’re pricing yourself too low.
Good luck!
What department are you in? What city? Siftly has a report you can google that has rates for strategists based on levels / years of experience.
No prob. Do not do math equations to figure out your rate! Just go by what the market rate is and get as much as you can.
The planner survey also has a good breakdown of freelancer rates. Then there’s what I’ve heard from a very well respected strategy director - take your annual salary and slash extra 00s. Eg your day rate would be 2k
That makes sense.
$2k a day feels right to me. I don’t mind being perceived as expensive. Just don’t want to be laughed out of the room.
Over the course of the year I typically try to bill 2x what my FT salary was. That helps account for taxes, investing, down time, hiring outside services etc.
I am billing 2x my annual salary as well which means I end up making as much, cover all my costs, put $$ in my IRA etc at the same or higher level...but have loads of flex time and 2-3 months off a year.