The Mud Blog

Freelance Rates: how do freelancers charge?

Last week we looked at some of the summary data about what rates were charged for freelancing in the UK. This week I want to look at some of the more general information about freelance working practices that was gathered in our survey. On the back of last years survey we wanted to look in more detail at how freelance folk work: what kind of projects do they work on, how many projects do they work on at any one time, how do they invoice for work, etc?

There were two questions we asked last year which fall under working practices so it would be good to look at how these compare with last years responses: do you ask for a deposit before working on a project and do you use a contract? It is great to see more freelancers requiring a deposit before starting work on a project – up from 52% to 62% of respondents. However the number of freelancers who normally use a contract has remained relatively unchanged (56% compared to 57% last year). 

Do you normally require a deposit before starting work on a project?

Deposit Count % 2012 % +/-
No deposit 171 37.83 47.21 -9.38
Yes, a fixed amount 6 1.32 1.86 -0.54
0-10% of project value 9 1.99 2.56 -0.57
10-25% of project value 68 15.04 15.81 -0.77
25-50% of project value 156 34.51 26.28 +8.23
50%+ of project value 42 9.29 6.28 +3.01

Do you normally use a contract?

Contract Count % 2012 % +/-
Yes 262 57.96 56.35 +1.61
No 190 42.04 43.65 -1.61

Clients and Projects

One thing I was keen to find out more about in the survey was the kind of clients and projects freelancers worked on. The majority of freelancers worked directly with clients (89%) whilst almost half (49%) subtracted for agencies and nearly a quarter (24.36%) worked with other freelancers. 

The average value of projects worked on was less than £3000 for 62% of respondents and less than £2000 for 43% of respondents. Only 22% worked on projects over £5,000 and 14% over £10k. This pattern seems to be reflected in the average length of project with almost half of respondents working for less than a month on projects and 85% less than 3 months. Only 14% of those surveyed worked on projects that took more than 3 months.

It was interesting to see that the majority of respondents worked on more than one project at a time, with 45% working on 1-2 projects at any one time, 30% on 2-4 projects and only 13% working on one project at at time.

Do you mostly work … ?

Work with … Count %
Directly with clients 407 88.96
Subcontracting for agencies 231 49.36
In partnership with other freelancers 114 24.36
Other 11 2.35

What is the average value of projects you work on?

Value Count %
0-1000 98 21.4
1001-2000 100 21.83
2001-3000 87 18.99
3001-4000 38 8.29
4001-5000 32 6.99
5000-10,000 35 7.64
10,000+ 68 14.85

What is the average amount of time spent working on a project?

Time Count %
< 1 month 228 48.2
1-3 months 177 37.42
3-6 months 36 7.61
6-12 months 23 4.86
> 12 month 9 1.9

How many projects do you tend to work on at any on time?

Projects Count %
Only 1 project at a time 62 13.19
1-2 projects 215 45.74
2-4 projects 141 30
4+ projects 52 11.06

Charging for work

As well as the kind of projects freelancers worked on I was interested in learning more about the way that freelancers charged for work. In terms of billing this was quite varied across respondents: 33% charged an hourly rate, 22% charged per project and almost 40% varied how they charged depending on the project.

Only 34% of respondents had a fixed rate for what they charged with the remainder offering a varying rate for their services.

The majority of freelancers (77%) invoiced within 28 days with almost half invoicing on less than 14 days and 15% within 7 days. 10% of respondents didn’t have any invoicing terms.

Unsurprisingly the majority (58%)  of freelancers operate as sole-traders with 36% working as a Limited Company.  44.7% of those surveyed use an accountant, with 36% self-accounting and 19% using some kind of online service for their accounting. Of the 237 respondents who said they used some kind of accounting software 63% said they used FreeAgent, with 8% using Freshbooks, 7% Xero and 6% using Crunch.

How do you normally charge for work?    

Charge by Count %
By the Project 69 22.19
By the Hour 103 33.12
By the Week 9 2.89
By the Month 5 1.6
Varies per project 122 39.23

Do you charge a fixed rate or does your rate vary between clients?

Rate charged Count %
Fixed Rate 156 33.84
Varies 305 66.16

What is your normal invoicing terms?

Terms Count %
Less than 7 days 70 15.15
7-14 days 133 28.78
14-28 days 154 33.33
more than 28 days 56 12.12
No invoicing terms 49 10.60

How do you trade?

Trade as …  Count %
Limited Company 171 36.46
Sole-trader 275 58.63
Partnership/LLP 13 2.77
Other 10 2.13

Do you have an accountant?

Accounting Count %
I use a local accountant 144 30.83
I’m self-accounting 169 36.18
I use an online service 89 19.05
I use a remote accountant 65 13.92

What accounting software do you use, if any?

Accounting software Count %
FreeAgent 150 63.29
Freshbooks 20 8.44
Xero 17 7.17
Crunch 14 5.91
Billings 11 4.64
Excel 10 4.21
GnuCash 4 1.68
Harvest 4 1.68
Quickbooks 4 1.68
Clearbooks 3 1.26
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