As the Bible states the workman is worthy of his meat (Matthew 10:10). How should a translator define the prices for his (her) services?
Recently I heard about someone who was considering to start as a translator. The native Dutch teacher was very convinced about his linguistic qualities in German and believed he could offer his service to Dutch companies. And hey, why not? He was not entirely sure about the right price to ask but considered to charge € 0,35 per source word.
That his proposed word rate was about four times the word rate of native German professional translators was justified. He as a native Dutch had a PhD in some subject and I – stupid – did not have it.

But how should a freelance translator define his price? The rates of freelance translators are varying greatly.

• There are regional differences
  Translators in cheaper countries need less income to keep up a good living standard
• There are differences from language pair to language pair
  Language pairs with less demand are more expensive
• There are differences from subject to subject
  Subjects which require more specialization are more expensive than more general subjects

To go short, the price for a technical translation from English into Dutch can be more expensive when done by a translator living in The Netherlands than by a translator living in Africa. A similar translation from Dutch to Chinese would similarly be more expensive than the translation from English to Dutch.

To come up with a good rate, no matter whether it would be a word rate or hourly rate, is therefore a bit more complicated than stating simply a rate that you consider to be worth. Of course you’re worth a good price, but when it is too high you will certainly have less work (although that will be compensated then by the word rate). In the worst case however you won’t have any work at all. Than the price you think you’re worth is against you.

What to consider when choosing a rate

When considering a rate for your work you should take into account the following factors:

• Your living expenses, i.e. mortgage costs, costs for electricity and water, costs for food, etc.
• Your business expenses, i.e. the costs for office, internet and telephone, software, etc.
• Taxes
• Some savings

That requires you to sit down and calculate all your costs at a yearly and/or monthly basis. When you know your expenses, you know what you need to earn at least to cover those expenses. But of course you want to have more. You want to have a comfortable life and some money for your holidays, retirement and car repairs when you need them.
Don’t forget your taxes. Taxes vary from country to country but you need to pay them. Period.

There’s another important thing you need to consider, which was not mentioned before. My experience in this business is that prices are under increasing pressure. Furthermore, when you have a set client base you often do not have any chance to increase your rates without consequences. In many cases translation agencies agree an acceptable rate with freelance translators. Of course there are agencies which offer rates that are not worth to wake up for, but you can turn down those offers. However, it is more difficult to increase your price once working for an agency. So in your rate you need to consider future requirements as well. If you don’t want to work 80 hours a week for the upcoming 20 years, you should increase your rate to a reasonable rate that is in line with the rates of colleagues, with your living standard and with market developments.

Calculating your hourly rate

Once you have calculated all your needs and some comfort, you can derive your rate.
Consider the following:

• Mortgage per annum                 $ 12,000
• Living expenses per annum     $ 10,000
• Business expenses per annum $   7,500
• Taxes                                             $ 7,500

The total sum of expenses only will be $ 37,000, which is roughly $ 3,100 per month. For savings and comfort you can add another $ 650 per month. Your required monthly income will be $ 3,750 then. In a year it will be $ 45,000. Considered that you want to have about 5 weeks of holiday a year, you will work 47 weeks. When working 40 hours a week, that will be 1880 hours a year. In those 1880 hours you will need to earn that $ 45,000. That means your normal hourly rate would be $ 24 (yes, that’s topped up – when working a full 40 hours for that rate a yearlong you would even earn more than required).

It must be said that you won’t be able always to charge that $ 24. Some agencies do perceive that as a too high rate, while you cannot invoice all hours too. It is therefore a good practice to calculate your minimum word rate as well. To earn enough to only pay your expenses, your hourly rate would be $ 20. This rate should be always the bare minimum you need to agree then.

Calculating your word rate

In the translation industry however much is charged by word. You should therefore not only derive an hourly rate, but a word rate as well. To calculate your word rate you need to know the average amount of words you can translate on a single day. The traditional standard is 2000 words for professional translators, although many translators nowadays translate somewhat more words a day. Given your daily rate of $ 192 (8 x $ 24) and an average translation volume of 2000 words a day, your word rate would be $ 0,096 ($ 192 divided by 2000).

Any thoughts? Please let me know!