Determining your rates and fees as a translator
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If you are a freelance translator, putting yourself in a position to do high quality work on an ongoing basis requires that you approach the job from an effective commercial standpoint. While the question "What rates should I charge?" is one that ultimately only you can answer, as a professional in the industry -- and an independent business owner -- you must be sure to address the question carefully. When you do, bear in mind the responsibility we all have to cooperate in creating an environment in which it is possible for translators who take the time to do high quality work, can be paid an amount that allows them to dedicate themselves to their work on an ongoing basis.
How payment tends to work in the translation industry
Before setting about determining one's rates, one must understand how payment tends to work in the translation industry.
Translators often quote their rates on a per-unit basis. The unit most commonly used is words, but characters, segments, lines, pages, "weighted words" (adjusted for repetitions, etc.), and even minutes and hours are also sometimes used. To determine how much to charge for a specific job, the translator determines the number of units in the job and multiplies it by his/her per-unit rate.
Some people believe that unit-based quoting isn't ideal for translation work because the units that translators produce don't all look the same and the units don't all take the same amount of time and effort to produce. However, unit-based quoting is common among translators and translation agencies, perhaps because it is simple to understand and relatively quick and easy to calculate, and because this approach often makes it possible to know costs in advance.
Other approaches to payment are sometimes taken, but these are less common. For more information on how pricing tends to work in the translation industry, see the article "Approaches used in determining payment for translation projects".
Determining your rate by calculation
The translator's rate is subject to mainly three factors, namely:
- How much money the translator wants to earn in a given period of time
- How many units the translator can process in that period of time
- What amount the client is willing to pay
A translator who uses per-unit pricing will use the following formula to determine his rate: gross income = units processed x rate (or: rate = gross income / units processed).
How much money the translator wants to earn
Whether a translator works in his personal capacity or as a one-person corporation, his income situation can be expressed in the following formula: gross income = profit + salary + other business expenses. For translators who work as private individuals, profit and salary are often the same thing. The amount for the salary is determined by the following formula: salary = personal expenses + income tax.
To determine your ideal salary, first find out how much your personal expenses are (including an amount of money you'd like to have as extra money), and then add a markup percentage to cover income tax.
Personal expenses may include: rent (including utilities), groceries, entertainment, repaying of loans, savings and retirement plans, insurance, clothing, furnishings, school fees (if you have kids), and money that you'd like to have extra.
The calculation to add a markup percentage for income tax, is as follows: salary = ((personal expenses) / (100 - tax rate)). For example, if the income tax rate is 34%, and your personal expenses are $5000, then your total salary = $5000 / (100-34) = $7576.
See also ProZ.com's rates calculator.
Translators based in the countries with weaker economies should take care to avoid a common fallacy: underpricing based on the seemingly cheaper cost of living. The latter mostly reflects low standards of living there. Simplistic calculations would probably show that a US-based translator should earn 5 times as much as someone working in Russia or 20 times more than translators based in India. If calculated properly, the cost of living in "cheaper" countries often turns out to be higher than in more prosperous economies when taking into account the healthcare expenses, higher price of imported goods, etc. Finally, one should be aware of the prevailing existing rates in the emerging and mostly globalized translation market as well as in specific local markets.
How many units the translator can process
The word "process" is used instead of "produce", because "produce" usually means units in the target text, however, translators often base their calculations on the number of units in the source text. For the purpose of calculation, you need to decide what type of unit you want to use (word, character, line, page, etc.) and whether it is source or target. If you use more than one unit in your work, you need to pick one of them and convert the other units to match. This may sound a bit complicated, but it is really not that complex.
Once you set your unit, a basic calculation can go like this:
Processed units = Workdays in the given period of time X Number of units processed in a day
Processed units = Number of work-hours in the given period of time X Number of units processed in one hour
(When you decide the number of workdays or work-hours, take into account the fact that you don't work 100% of the time).
How much clients are willing to pay
Notwithstanding the above discussion, which represents the true, ideal position we should be taking, there are many agencies who are coming back to the translator after having received the quote and asking for a slight reduction. "We have received your quote and would like to work with you but our job only pays 0,09 EUR per source word and your price of 0,12 EUR is too high". The best thing to do in this situation is run away as quickly as possible, or, better yet, try to insist on your original price. Perhaps this is the point where you bring out your big marketing guns and ammo that prove why you are worth what you are asking for. For example, "I am an expert in XYZ and I can provide a well researched and meaningful text."
Unfortunately, the reality is that more and more translators are acquiescing and agree too willingly to the lower rates just to get the work.
Determining a rate by polling
Another approach used by translators in setting rates is to make inquiries into the going rates, and to seek to achieve rates that are within, or more preferably, at the high end of the range.
Some information on rates is available online; many translators and translation companies publicize their rates. Others do not publicize their rates, but will share them in personal conversations.
Industry surveys have also been performed by various bodies, and websites like ProZ.com make some aggregate rate data available. (See http://www.proz.com/?sp=rates_view for example.) It should be taken into consideration when evaluating the average rates shown in such aggregated information that many factors go into pricing, and the rates earned by translators vary substantially from project to project, and from translator to translator; what one translator is paid for a given text may be several times what another is paid for a text from the same document.
Premiums and discounts
Two main types of volume discounts are thinkable:
- On a per project basis, ie. the discount is warranted by the scope of one particular project and is valid for this project only.
In this case the consideration may be that the translator will increase their output in the course of the project because as they get more familiar with the subject matter and its specific terminology they will work faster (spending less time on research, glossary look-ups, etc.).
- On a per client basis, ie. the client requests a volume discount arguing that they will send "enough work to keep the translator busy".
Whether it makes sense for the translator to grant such a discount needs to be carefully considered: If the client is an agency sending lots of different types of material for translation (different subject matter, different terminology, different file formats, etc. for each project), a volume discount may not make much sense for the translator because the advantages described above (increasing familiarity leading to a quicker turnaround) will not materialize. Instead, the translator might have a steady flow of work at a discounted rate, thus making them unavailable for work from other clients paying the "normal", non-discounted rate.
Volume discounts may be given by applying a lower per-unit rate when calculating the final price for the project or by discounting the total amount for a given project by a certain percentage.
Some translators working with CAT tools give discounts for repetitions and 100% matches, and sometimes fuzzy matches, too. Think carefully about whether you want to do this as it can represent a significant reduction in income and to a large extent negates the benefit of investing in a CAT tool. Furthermore, it also means that work you do now is likely to be recycled by translation agencies and any similar work you do in the future will be heavily discounted.
CAT tool analysis provide the basis for repetition discounts:
- Words in new segments have no discount and provide the basic rate
- Words in fuzzy matches (for instance 99% to 75%) get a moderate discount
- Words in repeated or 100% segments get a big discount.
Bear in mind that the only way discounts make sense if working with the given CAT tool actually increases your productivity. In other words, if you can process more volume by using the tool, then you can think about offering some discount. The amount of discount should be proportional to the productivity gains, and that depends on the languages involved, the type of text and some other factors. For example, if the target language uses conjugations, inflections while the source uses prefixes, a small change in the source may require a more extensive change in the target. In other words, a source sentence that is a 95% match may be only a 50% or lower match in target terms. Sometimes the surrounding sentences need to be modified as well, even though the source is the same. Based on experience, translators can estimate the time savings/productivity increases that can be achieved by using a certain tool for a certain type of job, and may be able to offer some discounts after taking into consideration the cost of acquiring and maintaining the CAT tool in question.
Another large factor is the quality of the TM (Translation Memory) that is to be used for the job. Having to use a low quality TM may actually result in more work than working without it, so translators should be careful about agreeing to use a TM of unknown quality. It is highly recommended to check the quality of the TM before accepting any CAT-based work. Some translators agree to discounts only if the TM is something they created earlier, and therefore can trust its contents.
So, again, giving discounts based on the use of a CAT tool may make sense in some cases, but this is not a requirement, and not something to be taken for granted.
Blog post on rush charges from Thoughts on Translation: http://thoughtsontranslation.com/2009/04/27/some-thoughts-on-rush-charges/
Many translators accept jobs that require weekend work. When they do, most charge extra, at least under certain conditions. This is in light of the fact that taking on weekend work may require canceling plans, arranging extra childcare, etc. On the other hand, a minority of translators takes the view that their service is offered on a 7-day-a-week basis, and their rates are already set to cover such contingencies.
For more discussion on this topic, see: http://www.proz.com/topic/160675
Source format charges
- Additional charges may be applied based on the format or file type of the original document(s).
- For instance a source document in PDF may need to be extracted or processed with an OCR tool or other software before it can be translated with the help of a CAT-tool.
- Hard copy or faxed documents produce another set of issues.
- Also some file types may require special CAT tools, as is the case of tagged source documents, or other specialized software.
Some translators apply a minimum fee, such as their hourly rate (i.e they charge for one hour), for small jobs.
- See poll: Do you offer a discount for early payments?
- Payment terms usually depend on the individual client and what the client and translator have agreed on during negotiations prior to accepting the translation assignment. They should be clearly stated in the purchase order, contract and in the translator's invoice to the client. 30 days is usually the standard, although agencies in some countries stipulate 45, 60 and even 90 days. The law in France, for example, has recently changed, reducing the legal obligation. For a long-term client, it then makes it worth your while to have your "billing month" end several days before the end of the calendar month, to give you time to have paperwork approved by the end of the calendar month and so get paid 30 days sooner than you otherwise would have been.
- But these agency standards are widely discussed and disputed among professionals. Some of them point out that a translator can provide better results when concentrating on his/her skills best, not trying to develop another business - a translator is not a bank and should be therefore not treated as a money lender. Or as a professional offering freebies. Upon negotiations with direct clients it's not uncommon to negotiate upfront payment or payment in advance - this can be a full payment in total or milestones payment when dealing with a larger text. Of course, in order to process a translation order with upfront payment accordingly, the translation client should check the business practices of the translator. Checking the feedback like the LWA entries on ProZ or the recommendations on other networking platforms can help, although - just like translators back-checking the business practices of their clients - the client should while checking not forget to take a look at the feedback granters. Reliable companies among such feedback entries might help in order to get some reassurance about the professionalism and reliability of the language service provider.
Some translators update their rates, informing their clients, at the start of the calendar year. See poll: Are you planning to update your rates for the coming year (2010)?
- The concept of an annual adjustment corresponding to the rate of inflation has been discussed in the ProZ.com forums: Annual rate adjustment to inflation rate
- Informal survey (with results) taken by forum participant: http://www.proz.com/topic/151528
- Free online CAT Weighting Tool
- Translation: Getting it Right -- A Guide to Buying Translations
- How to set your translation rates, by Corinne McKay
- US Department of Labor data on translator and interpreter income
- US CalPro: A free spreadsheet to help translators calculate costs, revenue, productivity and rates