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When starting out as a Microsoft excel worker, you want to make sure you get paid proportionally to your skills and experience. Sadly, there is no universal system to help you set your charges, but I got a solution for you.
You should charge a minimum of $25/h (per hour) for basic tasks and $100/h for complex tasks in Microsoft Excel. This ranges between $4,000 and $16,000 per month, assuming you bill 40 hours a week. While setting your rate, you should consider your monthly expenses, skills, and experience.
This article will guide you through the process of setting your rates so you don’t underestimate your work’s value.
I’ll explain how to decide your hourly excel rate, which factors you should consider, and whether you can set a flat or an hourly-based rate!
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How To Decide Your Hourly Excel Rate
Not all excel gigs are the same. If you work with multiple clients, your hourly rate should be flexible enough to accommodate each unique task. However, it should stay within a reasonable range—usually between $25/h and $50/h.
Here’s what you should consider when deciding how much to charge:
- Your experience: The longer you work with Microsoft excel, the more you encounter large and complex projects that broaden your knowledge. As you gain experience, you’ll be able to charge more. Most beginners charge $25/h, intermediate workers $50/h, and experts $100/h and above.
- Your skills: You should increase your hourly rate for Excel tasks requiring specialized skills. First, there is a high demand for such talent and less supply, which gives you a competitive edge. Secondly, the tasks can be tedious and mentally draining.
- The complexity of the task: Before accepting a job, you should assess it to determine its difficulty level. Your rate should be lower for basic tasks and higher for challenging ones.
- Market rates: You should consider the range of other Exel workers to ensure you remain competitive and don’t miss out on opportunities.
Deciding your excel hourly rate is not just about how much you want to make. It’s also about the quality of life you want to live.
Both novices and experts make the mistake of charging low rates to make their services more attractive. But setting a rate worth your service’s value broadens your prospects and attracts employers willing to pay a fair amount for quality work.
You should follow these steps when deciding your hourly excel rates.
1. Estimate Your Expected Yearly Salary
If you solely depend on excel work for survival, your hourly rate should be sufficient to cover all your monthly expenses and earn you a profit.
First, you’ll have to add your current overheads, including the costs related to the job, such as:
- Hardware and software
- Internet fees
- Rent and household expenses
- Skill improvement expenses
Spending every dime you earn and having no savings for emergencies is not a good financial strategy. On top of your expenses, you should add a profit margin or the amount you want to make beyond the monthly bills.
Your profit margin should be realistic and relative to the competition you face and your economic environment. If the market is competitive and the economy is depressed, your profit margin should not exceed 25%.
Lastly, multiply the expected monthly earnings by twelve to get your annual income.
2. Estimate Your Billable Hours
Billable hours are the hours spent doing actual client work. If, for example, you use the traditional structure of working 40 hours per week, you’d be working for 2080 hours annually.
However, you should not forget to account for the days you’ll not be working, such as during vacations, holidays, and sick days. Also, the hours you spend doing administrative work, making calls, and sending emails should not be billable. To adjust for them, you should subtract 25% from your total billable hours.
3. Determine Your Hourly Rate
Once you have your expected annual salary and billable hours, you can determine your hourly rate by dividing the income by hours.
Hourly rate = Annual income / Annual billable hours
Let’s look at an example:
Assume that you estimated your monthly expenses to be $3,000 and wish to make a 25% profit. And during the year, you’ll go for a three-week vacation, have seven holidays, and have a five sick days allowance. How much will be your hourly rate if you work 40 hours per week?
Step 1: Determine your annual income:
Keeping in mind that annual income is simply your monthly income x 12, here’s what you need to calculate:
- Monthly income = Expenses + Profit allowance [$3,000 + (0.25 x $3,000) = $3,750]
- Annual income = ($3,750 x 12 = $45,000)
Step 2: Calculate your annual billable hours:
- Annual billable hours = Total working hours – Hours not attributable to client work
- Total working hours = Weekly working hours x Number of weeks in a year (40 hours x 52 weeks = 2080)
Hours not attributable to client work:
- Vacation = (3 weeks x 40 hours = 120 hours)
- Holiday = (7 days x 8 hours/day = 56 hours)
- Sick days allowance = (5 days x 8 hours/day = 40 hours)
- Total hours = 216 hours
Annual billable hours = (2080 – 216 = 1864 hours less 25% idle time = 1398 hours)
Step 3: Determine your hourly rate
After making all the previous calculations, you can determine your hourly rate.
- Hourly Rate = Annual income / Annual billable hours ($45,000 / 1398 hours = $32/h)
Of course, you’re not bound to keep this exact hourly rate throughout the year. It’s just a starting point. As you gain experience and win better clients, you’ll be able to charge higher rates.
Can You Use the Flat Rate Method for Microsoft Excel Work?
Flat rate billing involves setting a fixed amount for each project. Unlike an hourly rate, where you receive compensation for your time input, a flat rate pays you for the value you produce. It’s simpler to manage, as you don’t have to track time or provide proof of working hours.
However, there has no accurate way of predicting how much a project is worth. If it takes you longer than you estimated to complete the project, you won’t receive payment for the extra hours you spend.
This method is ideal if you have previously worked on a similar project and know how much time and energy the job requires.
You deserve to earn a salary equal to the value of your work. The secret lies in knowing how to set your hourly rate so you can have enough to pay your expenses and put profit back into your business.
In this article, we’ve discussed the average rate that you should charge for your Excel work and how to determine the value of your work.
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