A while back, I had the pleasure of interviewing freelance developer Ryan Waggoner for our No B.S. Course on Freelance Writing. We talked about several topics, but what he said about hourly rates has stuck with me the most.
He pointed out that there’s a severe problem with charging by the hour. As it turns out, hourly rates are bad in many ways.
Here’s a quick summary of why you shouldn’t charge hourly:
In the video, I only covered two reasons why hourly rates aren’t ideal, but there are many more reasons.
Here’s an overview of the main problems with hourly rates:
1. Hourly rates punish efficiency and productivity.
Since hourly rates are based on time, you’ll get paid according to the amount of time you spend on a job. In other words, the longer you spend on a job, the more you’ll get paid.
This is a huge problem because it punishes efficiency and productivity. If Writer A and Writer B do the same job but Writer B takes longer, they’ll get paid more just because they took longer to do it.
If you’re an efficient writer, you’ll earn less money. How ridiculous is that?
2. Hourly rates don’t mesh well with the average freelance writer’s workflow.
Hourly rates require you to log your hours, and this can create some major friction.
First, there’s the problem of simply having to keep track of your hours. While freelance writing should definitely be structured, the beauty of freelancing is that you can be the master of your own schedule. Hourly rates diminish that by forcing you to work under a more typical structure.
Second, writing is exhausting. Even if you do it for a living, writing is mentally tiring. It’s not exactly the kind of thing you can grind out for hours at a time. In other words, you probably don’t naturally operate on an hourly basis.
Third, calculating hourly rates is somewhat pointless. You could fudge all the numbers, and the client would never know! Even if you’re truthful and transparent, there’s no real way to tell. In this way, hourly rates are fundamentally flawed.
It’s much better to use a per project rate. This rate type is super easy for clients to process, and it means you’ll get paid what you deserve, regardless of how much time you take on a job.
If you’re currently charging by the hour, you should definitely consider changing over to a per project rate. If you’re a new writer, check out our video on setting a starting rate.
Your Turn: Do you charge hourly? If so, are you going to change that?