Most people look forward to doing their taxes with the enthusiasm normally reserved for the dentist’s office. Yet for writers it’s especially important – especially when considering deductions and other potential benefits for the self-employed. Tax season also offers an opportunity to examine one’s financial health and future, to determine which clients were rainmakers and which others soaked up your time and talent with little or no return on investment. For 20-some years, member and former ASJA president Jack El-Hai has successfully followed a basic blueprint for setting his fees. “I got the formula from a website for freelancers,” he says, adding the provision that “there are many other things to think about when accepting an assignment, such as how enjoyable the project might be and potential exposure to new readers and markets.”
The procedure is straightforward…kind of. “You start with determining your goal income, say, $100,000,” he continues. Then add business expenses (anything from office supplies to web hosting and internet, even upcoming necessities like a new laptop or smartphone) and benefits to that overall figure. The latter includes all insurances – health, disability, life, and liability, if applicable – as well as monies you might want to set aside for a retirement account, although Uncle Sam supposedly takes care of Social Security. “If the total comes to something like $150K, divide that figure by the number of hours you expect to be billable.”
Huh? Not the exact number of hours you are physically at your desk or in the office, Jack goes on to explain, but time you will be actually writing, “which for many people, is closer to 20 hours a week,” when one takes into account querying, interviewing, following up on phone calls and emails, preparing speeches and other publicity efforts, researching, viewing cat videos or scrolling through Facebook, Twitter, Instagram or Pinterest. Also factor in holiday, vacation and sick days when computing the final number, “so it’s more like 48 weeks.” Here’s where the scary math part comes in: 20 hours a week x 48 weeks a year = 960 hours total. Then divide your $150,000 goal by 960 and voila! You have a per-hour fee of $156.25.
Jack advises NOT sharing this figure with clients. “It might scare them off and it’s only for your information anyway.” He also recommends taking each particular market into consideration. “For example, the fee may be unrealistic when doing a magazine article to test drive a book idea,” exposure from which might result in publisher’s contract and potential lucre from subsequent speaking engagements and sales. “If you accept work that pays less than your hourly rate, the numbers demand that you also accept an equivalent amount of work that pays more than your hourly rate to meet your income goal.” Well, that makes dollars and sense and balances out the consequences of taking on low-paying work.
While publisher’s rates are stagnant or in some cases, even lower, Jack’s hourly fee has gone up. “The point is you have to be versatile.” And let’s face it. If we writers had the souls of accountants we’d be basking in our IRAs and other investments, rather than stirring the pot with our words, thoughts and ideas.