Calculating The Rate to Charge For Your Time and Equipment

Posted on by Larry

[ This article was first published in the May, 2009, issue of Larry’s Final Cut Pro Newsletter. Click here to subscribe. ]

You don’t need me to remind you that times are tough. A while ago, I put together several video tutorials on how to look for work, how to keep clients, how to improve your marketing, and how to close sales. These have been very popular segments in my seminars and I want to remind you about this resource.

This training is focused on the idea that the best way to get a job is to never ask anyone for work. Don’t ask for a job, ask for an opinion.

If you are new to the industry, or looking to expand your current client base, invest a few dollars and 90 minutes of your time and watch this training. It can make all the difference when looking for work.

Click here to learn more or purchase these tutorials.


Here’s an example of why Growing Your Business can be really helpful – especially if you are just starting out. Justin Rhodes writes:

I want to get your opinion on something. I am starting my video company and I do good work for Great prices. By good I mean very much better than beginner level, when most of my clients would settle for something that was decent. I want to get into a lot of weddings etc. What would be a good price to charge for filming and editing these events. I know $500 is veryyy cheap, but I just want my prices to be unbeatable.

The second part to this question, this woman wants me to film an event that would take place over the course of a weekend. Dates July 27th to August 2nd. Okay, not only will I be shooting for a lot of those days… but I will be editing etc.

Okay, here’s the kicker, it will be in Houston, Texas! And I am from Dallas! So really, taking into account where I would stay, what I would do… my gas, my travel and all of the etc’s… What is a good starting point. I wanna charge great prices, but not “stupid” prices.

Larry replies: Justin, these are great questions, because it shows you want to make a living, not simply do all your work for free. You have a choice – you can price yourself “veryyyy cheap” and be unable to support yourself in a year or two, or you can price yourself to earn a living and keep doing this for a long time to come.

Remember, there will ALWAYS be someone cheaper than you. If all you offer is a low price, you have nothing to fall back on when someone else undercuts you.

Keep in mind that unless you have a friend or associate that likes buying computer gear for you, and your food, and rent, and …, at some point, you’ll need to the money to do these things for yourself. So, take a step back and figure out what it takes to do this as a business.

We start by working this backwards. Figure out how much money you want to earn in a year. Say, $30,000.

Assume that as an editor you’ll only be employed for half the time — 26 weeks. (Hope for more and plan for the worst.)

Assume you will work a normal work week when you are employed — 40 hours per week. (This is NOT true in real-life, but it helps with the budgeting process. You’ll probably work many more hours in a week than 40.)

Multiply the number of weeks you’ll be working by the number of hours per week (26 * 40 = 1,040) and divide that number into the amount you want to earn (30,000 / 1,040 = $28.84.)

$28.84 is the MINIMUM hourly rate you need to charge for your time.

Increasingly, the industry is moving to either weekly or flat fees. A weekly fee is how much you charge on a weekly basis to edit something. Using this same formula, and assumptions, your minimum weekly fee would be: 40 * 28.84 = $1,153.60.

For a flat fee, calculate how many hours you expect to work on the project then multiply that by your hourly rate.

There is nothing wrong with asking for more. Hopefully, you’ll get it. These numbers just illustrate the minimum amount you should charge.


Next, you need to calculate the fee for the use of your computer gear. Don’t confuse the cost of your time with the cost of your gear. No one would hire a lighting director and expect them to provide all the lights, grip equipment, crew, and electricity for free. Neither should they expect you to provide your gear for free.

Don’t get talked into providing your computer gear for free. It costs you money to buy, maintain, and replace it. None of those are free. Also, by having two separate fees, you have an incentive for a producer to provide you equipment, because they can save that part of your fee.

To start this calculation, assume that you need to replace all your computer and video equipment every year. Divide the total amount you need to replace your gear by the number of working hours we used in this example (1,040). This number varies by individual, so you’ll need to create your own set of numbers.


Finally, if travel is involved, tell your client that you pass through all your travel expenses. These do not get marked up. If you spent $500 for travel, hotel and food, you charge your client $500.

UPDATE – May 19, 2009

Shaun Roemich adds:

Larry: I notice you suggest that travel costs be passed along to the client at actual cost in your recent response to Justin Rhodes. My standard practice is to either:

  • Have the client pay all accommodations, travel costs and per diems in advance
  • Make appropriate arrangements for my travel and accommodations; or
  • Mark up actual costs slightly to compensate for the fact that I am out of pocket for expenses UNLESS I have already collected a deposit.

My position is that I should NEVER be out of pocket for expenses (with the possible exception of consumables as I keep stock on hand as a matter of course) as this risks allowing the client to use Terms of Payment to buy themselves some extra time to pay, essentially passing the carrying costs on to you, the producer.

Your thoughts?

Larry replies: This sounds good to me. This way, the client feels they are in control of all travel-related expenses.

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One Response to Calculating The Rate to Charge For Your Time and Equipment

  1. Thank you, this is very helpful

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