Find the right rate

Example 1 of 4

Marta in Madrid

Marta has just registered as an autónoma. She wants €2,000 a month left over for herself, after the tax office and social security have taken their share. She works a six hour day , five days a week, and thinks about 70% of that is time she can bill to a client.

Values to enter into the calculator

To keep €2,000 a month, she has to invoice €40,147 over the year: her own money, minus €6,000 of expenses, minus €5,127 of social security, minus IRPF (income tax).

After she takes her holidays, bank holidays, 5 sick days, and the 30% of her time that goes on quotes, invoices and email, she has 928 hours left to bill.

Her resulting hourly rate is: €43.25 per billed hour.

As a new autónoma she is entitled to the tarifa plana for her first year, €88.56 a month to social security instead of €427.21, and with it turned on the calculator would answer €38.87 an hour. However, she does not want that number. If she used this hourly rate, she would have to renegotiate with every client a year later as her costs rise.

So she quotes the rate without the discount and puts the difference away into savings or investments: about €4,064 over the first year. This is important: if work dries up, this will probably be the only reserve she can fall back on. As an autónoma, she is unlikely to get much, if any, public support in this situation.

Open the calculator with Marta's figures

Example 2 of 4

Tom, invoicing London

Tom moved from England and kept his employer. He is on the books in Spain as an autónomo and sends them one invoice a month. The arrangement is unusually generous: they pay him for his holidays, they pay him when he is ill, and there are no other clients to quote for, chase or invoice, so an eight hour day is eight hours of work he gets paid for. He wants €2,500 a month for himself and rents a desk at a coworking place.

Values to enter into the calculator

He invoices €45,452 over the year, of which €5,744 is social security, and he has all 2,080 hours of a full working year to bill it in.

His rate: €21.85 per billed hour.

That is half what Marta needs on the previous page, for more money in his pocket, and none of the difference is about the work being worth less. It is entirely that somebody else is paying for the holidays, the sick days and the unbillable hours.

Open the calculator with Tom's figures

Example 3 of 4

Diego, three days a week

Diego consults part time and has a young child at home the other two days. He wants €1,200 a month for himself. He is in his first year, so he is on the tarifa plana: €88.56 a month to social security instead of the full quota.

Values to enter into the calculator

He invoices €19,822 over the year and has 536 billable hours to do it in.

His rate: €37.02 per billed hour.

Two things worth noticing. He wants a bit over half of what Marta wants, but his rate is not far below hers: social security and the unbillable hours do not shrink with the working week the way the invoices do. And the rate above is a first year rate. When the tarifa plana runs out, the quota goes up and the same take-home needs a higher rate, so it is worth running the year after now rather than finding out in January.

Open the calculator with Diego's figures

Example 4 of 4

Ana and the van

Ana is an electrician in Zaragoza. She is out of the house at seven and back at six, but only about half that is billable time. The rest is driving between jobs, queueing at the wholesaler, writing quotes and going back to a flat whose owner was not in. She runs a van, carries her own tools and insurance, and wants €2,200 a month for herself.

Values to enter into the calculator

She has to invoice €52,254 over the year, of which €14,000 leave her pocket immediately, and she has 1,079 billable hours to earn the money.

Her rate: €48.42 per billed hour.

A customer hearing that thinks she earns €48.42 an hour. Run the same year with a desk worker's costs instead of a van's, €2,000 rather than €14,000, and the rate falls to €37.30. So roughly €11.12 of every hour she bills is the van, the tools and the insurance driving themselves to your door. It is not margin, and it is the part of the bill that is hardest to see from the other side of it.

Open the calculator with Ana's figures