How to Figure Out Your Audio Engineering Rate

by Nick Messitte, iZotope contributor

August 8, 2017

Metalworks Institute, Campus Studios, Studio 6

Metalworks Institute, Campus Studios, Studio 6 | Photo via Wikipedia

Figuring out what to charge your clients, especially in this economy, is a challenge. But it’s also hard for personal reasons: If you're new to the game, or just out of school, you probably harbor some doubts about your overall skillset. Conversely, perhaps you just feel sheepish asking people for money (I know I did, when I was starting out). Maybe you’re even tempted to—egads!—offer your services for free while you establish yourself.

First of all, don't do that. Sure, it's fine to practice on a friend's track to keep your chops up if you have no work at the moment. But that’s different from freely offering your services.

When you agree to take on a project for free, you're not only devaluing your work with that client (it’s hard to go from zero to $200 a track), you’re devaluing the market for the rest of us. No joke: I used to take a couple thousand for an independent short film. Now people try to offer a quarter of that. Sure, plenty of factors have contributed to the decline of freelance wages, but don't be part of the problem!

Okay. Diatribe over. Now, let's focus on a clear-eyed, gimlet approach to figure out what you’re worth, and how much you should be charging.

Research Your Peers' Rates

First off, go online and research what other people charge in your area. Luckily, many engineers do display their pricing structure online. Not everyone freely disseminates their rates, but enough people do for you to glean an overall estimate.

Do try not to be sneaky; don’t call a studio and ask them their rates unless you have no other option. Instead, frequent contracting platforms like Craigslist or Upwork, or ask around on a forum. People tend not to mind the question.

During this enterprise, keep your eyes open for more than pricing structures—also pay attention to the inevitable examples of your peers’ work. Listen to their results. Study them.

Now comes the clear-eyed look in the mirror: it's time for you to see you stack up. You’ll never find a perfect comparison, because conditions are not reproduced exactly from recording to recording. Still, there are ways to compare. If you have tracks in your portfolio of roughly the same genre, you can use your ears and metering equipment to see if you're in the ballpark of your peers.

You should invite your friends to help you in this. No offense, but you're probably not the best judge of how you sound. You're far too close to yourself, and your opinion will change with your mood.

Others, however, can provide a smattering of differing perspectives. Invite a few people over for the comparison session, and make sure they hail from various backgrounds. It's good to have an engineer friend check out the differences, but also ask a civilian to attend. Even if nobody can identify whose work sounds better, that's a valuable answer, as it means you're in the ballpark.

Just be sure you're not taking advantage of your friends here; always offer to spring for dinner or pay for drinks. And definitely tell them your intentions beforehand: you don't want to be that jerk who keeps inviting people over for selfish reasons. If you’re living in a new area, and haven’t made friends quite yet, you can also email all pertinent links/examples to a few trusted confidants.

The above tactics work for various disciplines, including mixingmasteringpost productionpodcast production, and sound design. If there’s one discipline that’s an outlier, it’s recording, because the comparison factor falls a bit flat. There are so many variables to getting a good sound in the location-recording field. So you may want to start by comparing rates with others in the area, and hope for the best from there.

Other practicalities to keep in mind: If you're mastering out of a host facility, you’re going to need to build their hourly rate into your price structure. The same holds true if you're recording instruments or voice-overs in a host studio. We’ll get to contractual work later, but when lawyers get involved, you’ll need to consider building their fee into your rate.

Now that you have an idea of what the competing rates are, what's the plan? That depends: if you're just starting out in a new area, you may want to set your prices at the lower end of the spectrum. Then again, you might not, because once you snag a client at a rate, it becomes very hard to raise the prices on them, unless they're the ones initiating the conversation.

Which brings us to some other considerations.

Have Different Rates for Different Jobs

After you suss out what the market can handle, you're going to hustle for gigs every which way you can—so you’ll need to come up with quotes for a variety of different services. I myself had no idea that I’d find the majority of my work in post-production. I also had no idea I'd be writing articles as much as I’d be mixing. Having an open mind to opportunities has kept me afloat and alive.

So here's what you do: Take a look at the time it takes you to complete a variety of different tasks, however tangentially. From this, you’ll be able to judge the units of time for which you’ll need to account. Then, look at comparable rates across your peer area. From here you should break down, for yourself, your rates as follows:

  • Per track
  • Per EP
  • Per album
  • Per short
  • Per feature length
  • Per episode
  • Per series (more reachable than you'd think, given the state of web content)
  • Per minute (audio)
  • Per minute (audio synced to video)
  • Per article
  • Per hour of studio time

The last one is important—it's the rate I hold to whenever a packaged deal goes over the contract we've agreed upon, whenever someone is in my studio, or whenever I'm working on location.

Once you've tabulated your rate card, feel free to advertise it or keep it to yourself—the important thing is you stick to it, until it's time to raise your rates, which you should do in concert with your growing skill, client base, and market forces.

In general, I find it harder to raise rates on existing clients; I prefer to take on new clients at a higher base-pay. Everyone operates differently, but eventually you will have to up your fee on a long-standing client. I make the choice to do this as my expenses grow, essentially raising my rates once every two or three years. Sometimes I don’t need/want to raise my rates; where I live, it’s been difficult for landlords to raise their rents, so I’ve passed the savings on to my clients. But it can’t last forever.

No, there isn’t a hard or fast rule for giving yourself a raise—other than “don’t be broke.” Personally, I like to give plenty of lead-time when I do make the choice to charge more, telling clients well in advance that a change is a’coming. Usually they understand.

Sometimes, however, that “no hard or fast rule” can come back to bite you, because even as you raise your rates, there will come instances where the inclination to work dirt-cheap will beat out your better senses. I’ve talked to GRAMMY-winning engineers who still take on bands for free sometimes! So let’s talk a little more about that.

Studio SQ Control_Room

Avoid Favor Rates

Yes, it happens to all of us—we have a friend in the industry who wants something, and we, being a friend, agree to do it on the cheap.

Let me say this upfront: If you can avoid it, don't charge favor rates. It seems like it might be good for your friend, and good for you—and there’s that elusive “exposure” we're all seeking—but upon further examination, the exact opposite is true.

The big problem is that you're now introducing business into friendship, which can backfire quite quickly. Should you not deliver what your friend wants, that could hurt your relationship. Similarly, should your friend want something unrealistic, that could also strain your relationship.

If your friend really likes what you do, then you're also in a bind, because your rate won't be increasing, unless your friend decides to pay more. Most likely, you'll find yourself in a position where your friend walks away with a whole album’s worth of mixes having paid, quite literally, a song; as your business grows, you'll be stuck having to make unrealistic deadlines when both projects—the one that pays, and the one that doesn't—are due in the same timeframe.

Then there’s the psychology of the favor rate, which manifests in unexpected ways: As you begin to work in a devalued state, a certain sloppiness of mind can very well take hold, wherein your resentments at being paid less begin to show in your work. You start to take shortcuts; you enjoy the work less. This is not good for you or for your friend.

I get it though; we all have people we want to help. I must confess, I break this rule frequently, and no, it’s not always to my detriment. Sometimes it works out great: Say I master a buddy's record on the cheap. In return, I get him playing an instrument I can't play on my next project for cheap. Works out, right?

Five times out of ten, I do find myself fighting the resentment though; luckily there are tools for that. If I remember that I am doing a service for a friend, and focus on the service aspect, that’s one way out of the resentment hole.

One time out of ten, the project and friendship invariably dies. If you’re okay with that, then proceed. But as the saying goes, proceed with caution.

How to Receive Payment

Nobody ever taught me how to draw up an invoice, just as no one ever taught me how to do my own quarterly taxes. This isn’t the best venue to get into the nitty-gritty of accounting, but I will say this: Find a professional-looking invoice template and stick to it, clearly demarking every individual service you have performed, as well as the date it was rendered. Send this as soon as the client agrees to the terms of the work you're providing.

On the invoice there will be a spot to indicate payment date, and here you need to make a choice: are you an “all upfront” kind of person, a “half and half” kind of contractor, or do you trust people enough to take payment on the back end? Only you can make this call for yourself, but consider this:

If you're just starting out, you probably don't have the clout to demand all the payment up front. You might send a client running for the door in the very asking. It's reasonable to request for half up front, and half upon final delivery, but even so some clients will not agree. Everybody has been burned, so it’s understandable.

If you go for one of the latter two options, and it's a job involving file delivery, there are ways to protect yourself. For recording work, don't release recordings of a session until you've been paid. In delivering a mix, you don't need to be so draconian: You can send full-res files with a reasonable amount of protection by employing early fades, unexpected dropouts, and other annoyances that render the mix unusable. These are quite frustrating for clients, so make sure you explain what you’re doing ahead of time, and include a lossy version of the mix, too (MP3, AAC, etc) for a full, yet unusable, picture.

Sometimes you’ll have to sign a contract for a long-term project. If the contract sports more legalese than you can stand, you might want to consider folding your lawyer's fee into your rates. Be explicit about this—it seems like a hefty ask, but it might help you weed out unprofessional people. For if a client wants to hire you for a long-term project, but isn't willing to help you secure protection in assuring the contract, that’s your red flag right there.

So You've Just Been Burned

The above suggestions should go a long way in helping you figure out your rates. All that’s left is to cover this one last base, and then we can send you on your merry way. While I sincerely hope you never have to deal with a dodgy client, in all likelihood you’ll have to at some point. So before we wrap up, let’s get into the most common excuses you’ll hear, and the best ways to counter them.

“The check got lost in the mail,” is often what you hear before the client skips town, so it’s good to have a game plan in place. First, your initial correspondence with the client should be kind, never accusatory (because mistakes do happen), but also firm.

Something like the following would suffice: “Hi so-and-so! I got your check, though on the memo line was a note reading ‘final payment.’ While I thank you for the check, we had agreed to a different final payment, as shown here in your email to me, dated…”

In case things do go south, it’s also wise to familiarize yourself with the laws in your principality, so you know the dollar between small claims court and full-on lawsuit. The former is pretty easy to carry out yourself, so long as you have those detailed invoices I told you to make, as well as a record of all your correspondence.

And yes, you definitely want all business arrangements—even those you made on the phone, with a friend—corroborated in writing, for this express purpose.

If this seems worrisome, fret not: Usually these issues do tend to iron themselves out; if you’ve held to principles I’ve outline above by clearing tabulating your rates, sending over invoices promptly, saving your correspondences, and the like, you probably won’t have to go down this road, as the documentation will most likely keep everyone honest. But still, it’s always good to be prepared.

Conclusion

Figuring out what to charge is a practice both necessary and wrought with internal strife. It requires holding up a mirror to yourself—to the very way you define yourself—and putting a value judgment on it. Furthermore, it necessitates uttering that value judgment, out-loud, repeatedly, and to strangers. Some people take to the mercantile aspect of the trade easily, but if you don’t, that’s okay. You didn’t go to business school! You’re a right-brain person, and transactional emails, phone calls, and epistles might stress you out. I know that’s the case for me! Still, you need to be paid for what you do. You deserve to be paid.

With this breakdown, it is my sincere hope that figuring out your rates—and, just as importantly, knowing how to stick to them—is now a task made more manageable.