What day rate should I set for consulting work?

Question

I am a final year social sciences PhD student in the UK. A professor reached out to me and asked if I am interested in a three-day consultant work for their project and if so, what my day rate is. I am definitely interested in the opportunity but I am not sure how much the day rate is as I haven't worked like this before (freelance consultant). Would it be polite to ask them to provide the day rate? Thanks.

Answer 1

No, do not ask the professor to choose a rate

Speaking as an academic who has recently obtained his PhD and who earns his living from freelancing and consultancy, I would not recommend bouncing the question back to the professor. If he/she already had a particular rate in mind, he/she would have said so at the time of offering the work.

Instead, I would advise doing your own research into the "going rate" -- in other words, what other freelancers of comparable credentials and experience charge for the sort of engagement the professor is proposing. Many freelancers have websites or online profiles, and these will sometimes give an indication of what they would charge. You may also want to ascertain discreetly how the work will be funded (is the professor paying you out of his/her own pocket, or does he/she have funding from another source, and, if so, what?).

In the last few years, I have charged figures in the range £70-£240 for a day's freelance work, depending on the "going rate" for the type of work, how much time and skill I think it will demand, whether I have to travel (and stay overnight away from home), whether the assignment is funded by a private individual or by an institution, how well I know the customer (and how much work I have done for him/her in the past).

Discussing the price

Deciding upon a quotation for freelance consultancy is tricky, especially if you are doing it for the first time. You could avoid committing to an exact figure too early by asking to discuss the project by telephone in the first instance. It is perfectly reasonable to say that you want to know more about what sort of work is required before quoting a day rate, and discussing it by telephone may allow you to get a better sense of what the customer wants. A reasonable customer will see this as a good sign that you are interested in doing the work and have a professional attitude.

When it comes to actually agreeing a price, always put it in writing (electronic mail is fine), reiterating what was discussed by telephone. That way, you avoid misunderstandings later.

When you give a quotation, you could qualify it with a statement such as "I am assuming that ____. Obviously, the rate would be different if ___." or "Based on what you have described, my day rate would be around ____, but I would need more details on ___."

General pointers about freelancing

• If you are doing unglamorous but highly skilled 'grunt' work (i.e.: if it is a so-called 'support' role), you can charge more. This applies especially in fields/endeavours where the 'headline acts' work for so-called "exposure" or volunteer for a "good cause". Last month, I provided a highly skilled 'support'-type contribution for a project where the 'headline acts' were not getting paid, but where I did get paid. Basically, if your name is going to be a tiny footnote in the acknowledgements, you should charge more than if your name is going to be on the list of authors (realistically, a couple of days' consultancy work is unlikely to be enough of a contribution to qualify for authorship/co-authorship).
• As a freelancer, you have no job security, and this should be reflected in a (significantly) higher day rate than for a permanent employee. A good analogy can be seen in mobile telephone service providers, where 'pay-as-you-go' costs more per minute/SMS/MB than a 'pay a fixed monthly amount for a fixed allowance', but would be better value for those who do consume relatively few minutes/SMS/MB.
• As a freelancer, you are responsible for your own pension arrangements, and this should be reflected in a higher day rate than for a permanent employee (who usually benefits from employer contributions to a pension scheme on top of his/her salary).
• As a freelancer, you are responsible for collecting payment and declaring your income to HMRC in a tax return (assuming you make more than £1000 from all freelance work/enterprise in a tax year). Making an invoice, chasing up payment, and doing your tax return are time-consuming administrative chores that a freelancer has to do but an employee does not have to do (then again, the bureaucracy of some big organisations is even worse).
• Be careful not to underestimate the difficulty of the job -- it is awkward to increase your fee significantly above what you quoted originally (unless the customer has made substantial extra requests). Speaking from personal experience, I have often found myself wishing I had demanded more money for an assignment after realising it was harder or more time-consuming than I had anticipated.
• As a freelancer, you are responsible for your "continuing professional development" in your own (unpaid) time and at your own expense, unlike a permanent employee (whose employer will cover the cost and allow the employee to do it during salaried "work hours").

Answer 2

Since you want the work (perhaps for its own sake as for the money) and you have the three days free of other obligations, you should be fairly paid.

You don't need to live on the money from this gig.

Using @Buffy 's starting point, $50K annually is $25 per hour, $600 for the three day job. Perhaps that's the annual salary you'd earn as a new UK PhD in social science, if you can find a job - I've no idea. That's more than pay for routine data entry, but less than what consultants get who consult for a living.

Thank the professor for reaching out - it is a mark of confidence in you. Then I think I might cautiously ask for $1000 (in pounds). Come down if they say it's too much, say yes to more if they say it's too little.

Let us know what happens.

Answer 3

It depends on who will pay any necessary taxes, but assuming you do, take a fair annual compensation for your skills and qualifications and divide it by about 240 or 250.

If you have other expenses, then add those as well, computed similarly if necessary.

In the US there are about 250 working days in a typical work year (5 days times 50 weeks). Elsewhere it is a bit less, I think.

Some people can adjust it upwards substantially, others need to suggest a more moderate amount, but don't underestimate your worth.