What is included in a hourly rate in the UK?



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This is my first post at tho forum, so let me introduce myself a bit:

I´m a graphic designer situated in Sweden. I´m currently working part time for a client on a hourly basis, study (starting on my MFA this fall) and do some freelance work too.

On the freelance side of my business I´ve recently started working for a UK-based client. And when I´m now about to calculate the fee for the first job, I realize I don´t know anything about how much these kind of services cost in the UK...

I´ve done some googling, and it seems like, considering my experience (BA in graphic design and 8 years of experience working as an Art Worker, an Art Director and Graphic Designer), I could charge something like £20-30 an hour?

But what does this mean? I´ve got a hard time to translate this amount to what would charge as a freelance in Sweden.

I´ll give you an example:

Lowest recommended hourly rate for a graphic designer in Sweden (based on recommendation of the swedish graphic designers association) is 700SEK, which translates to £63. (VAT not included)

Sounds quite high... But, considering that (and i´ll be doing some really rough maths here...) tax, employer contributions, etc almost "steals" 40% of that sum, you've got about £36 left. And that money is supposed to cover mortgages, rent and insurance. Not much left for the actual salary...

I know that I can't apply this calculation to the UK, taxes etc are higher in Sweden for example...

What I really want to know is how I set a rate that won't scare my customer off, but still will give me a decent income since I´ll be still paying the tax in Sweden, since this is where Im situated.

So I guess my question is: If I would say my hourly are is £25 (for example) what is included in that price? Just the rate? VAT is on top of that?

Also really curious how you cover all the costs of running your own company. When I´m employed (doing part time, payed by the hour) I get payed about £20. But that is my salary (well I have to pay taxes of course) But none of the costs that comes with running a company...

I´m not sure this post makes any sense, but I guess I´m after some help to understand how it works when being a freelancing graphic designer in the uk. I find the "how much to charge-problem" very complicated now when the world gets smaller and smaller because of all the benefits of internet, e-mail and Skype...

All help / advice welcome, thanks!


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