How to work out what to charge for a translation job
Factors to include
When you are setting out as a freelance translator, knowing what rate to charge for a translation job seems an impossible task. If you read the article on what factors make quoting for a translation job so difficult, you’ll have a thorough understanding of which factors you may want to include when pricing up a job.
Initially, the majority of freelance translation service providers work mainly for agencies. Translation agencies tend to dictate the rate a self-employed service provider gets paid. So, when you find your first direct clients, you will probably be at a loss about what freelance rates to charge them. So, most new translators just guess what the “going rate” is and pitch their price around that mark.
This is a flawed approach as it doesn’t actually take into account what you’ll need to live.
Calculating a target income
To get a clear idea of how much income you will need as a self-employed person before your business becomes viable, it is important, first of all, to know all outgoings.
Let’s assume you have a home office and are solely responsible for all household expenses. In this scenario you need to include the following costs in the calculations of charges for services rendered.
General living costs
Rent or mortgage; utility bills; telephone bills; Internet; council tax; car expenses including tax, MOT, petrol, service or public transport costs; all insurances; food; clothing; newspapers; hairdresser; holidays; birthday presents; Christmas presents; pets etc.
Office rent, computers, telephones, Internet, stationery, postage, professional indemnity insurance, membership of professional institutes like the CIoL or the ITI, occupational disability insurance, CPD costs, utility bills (if not part of the household bills) etc.
Add in a safety margin for savings and emergencies and you arrive at your total monthly or annual living costs.
Indirect costs that the translator must take into account are weekends, bank holidays, holidays and sickness and days without work coming in. They all represent lost income. Furthermore, freelance service providers should calculate how many days a year they are likely to have income generating work.
Productive working time
Income generating time excludes time spent with marketing, admin, dealing with client enquiries etc. Marketing, admin and CPD can usually be fitted into slack times with little working coming in. However, it is important to make sure that there is time for these activities and other unexpected work-related interruptions in any business week. Depending on the complexity of a freelancer’s business and their general working speed, they may lose between ½ and 1 day a week to those activities.
Working out a target income as a basis for setting freelance rates
Calculate your required daily income as a self-employed professional by taking the total monthly or annual living costs and dividing it by the number of productive days.
Divide the resulting number of days by the hours you can work. This will give you the average amount of money that it is necessary to generate on each productive day.
This amount will be a very good guideline of the average rates a freelancer like you has to charge to meet all their living costs.
The whole process of working out costs, required income and rates to arrive at sustainable freelance rates is time-consuming and daunting. But if freelancers don’t want to live hand-in-mouth, forever worried about the next bill or financial emergency, it’s time well spent!
Perhaps you are sceptical when reading this. If you were to pitch your freelance rates according to the above guidelines, you may never get a single job as you’d be way above the “going rate”.
The most important point of the exercise is knowing how much you should be earning.
Having ascertained this figure, you now have to decide whether you can earn this amount of money as a freelancer or what you need to do to earn the target amount. This may include increased marketing, networking, diversifying, targeting a different market, changing your service, improving qualifications etc.
Being a freelancer means constantly assessing where you stand and how you are doing.
Working for direct clients
Your translation rates can be much higher if you work for clients directly, without using an intermediary. This is due to the fact that you can afford to charge much lower prices than agencies as your costs are significantly lower than theirs. Clients who are used to paying agency level fees will find your prices very competitive.
Doing market research
Translators also need to do some market research. You won’t know what the “going rate” for your language pair is, unless you ring around some agencies and some professional translators. You’ll very quickly realise how wide the price range is.
Considering market factors when working out what to charge for a translation job
I know of no country that places legal restrictions on how much you can charge. What determines your basic translation rate is mainly determined by a few market factors:
- Are you working for direct clients or for translation agencies?
- What do agencies/other translators charge for your language pair?
- How much are clients willing and/or able to pay for a translation job in your (area of the) country?
How do you know you have got your pricing right?
As a rule of thumb, I would suggest that if you convert about 80% of your quotes into orders, you have market-appropriate rates. If you convert fewer, you are probably too expensive, if you convert more, you are too cheap.
Taking into account the competition
If you are in direct competition with other freelance translators though, you’ll find a cutthroat environment out there. There are a number of sites on the Internet where translation service providers are pitted against each other like modern-day gladiators. The lowest quote wins. Don’t go there. It would be better for you to work for a reputable agency.