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Do you charge peanuts? Are you sure?
Thread poster: Samuel Murray

Samuel Murray  Identity Verified
Netherlands
Local time: 20:17
Member (2006)
English to Afrikaans
+ ...
Aug 1, 2008

I post this in response to something being said in this thread:

http://www.proz.com/forum/money_matters/110674-who_works_for_0035_eur_word-page5.html#907616

Okay, many people on that thread say that they charge a fair rate (fair to themselves). But do they really? Tell me what would be fair assumptions for your country, please. With that in mind, let's calculate (based on an earlier study I did for Inttra.net):

Assumptions: South African translator, fresh out of college. I converted the local currency into EUR at an exchange rate of EUR 1 = ZAR 10.

Initial debt (pay off over 5 years):
Four years of training = EUR 17 500
Equipment (excluding furniture) = EUR 2500
Interest rate = 15%
Total: EUR 475 per month

What would the initial debt be for a translator in your country?

Running costs:
Stationary, internet, phone calls etc = EUR 400 per month
Marketing and related = EUR 200 per month
Further training = EUR 12 000 for 2 years (i.e. EUR 100 per month)
Dictionaries, workshops etc = EUR 100 per month
Total: EUR 800 per month

Are these reasonable running costs for a translator in your country?

Transport:
A year-old car (EUR 10 000) = EUR 293 per month
Insurance, petrol etc = EUR 250 per month
Total: EUR 450 per month

What does transport cost in your country?

Housing (work from home):
Small house (EUR 60 000) = EUR 790 per month

Not all countries have a buy culture -- some can only rent. What is a reasonable rent for a translator in your country, with a home office?

Medical and pension= EUR 500 per month
A reasonable beginner's salary = EUR 800 per month
Income tax = Add 20% to all non-deductibles

Do you think these numbers are reasonable, if compared to your country?

Let's count it up:

Initial debt = 475
Running costs = 800
Transport = 450 (small used car)
Housing = 790
Medical etc = 500
Basic salary = 800
Income tax = 100

Total to break even = EUR 3 915 per month.

Hours per month = 100 (not counting time spend studying and doing marketing)
Therefore, translator must earn EUR 40 per hour.
If he translates 500 words per hour, his rate should be EUR 0.8 per word.
Add 25% for a proofreader, then that's EUR 1.00 per word, and that would be a fair rate for him.

If his minimum *fair* rate would be EUR 1.00 per word, what should be absolute minimum unfair rate be? Would you survive if ProZ.com caps the minimum rate at half of that, at say EUR 0.5 per word?


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erika rubinstein  Identity Verified
Local time: 20:17
Member (2011)
English to Russian
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How do you calculate your costs? Aug 1, 2008

"Stationary, internet, phone calls etc = EUR 400 per month"


I pay maximum 100 EUR a month


"Marketing and related = EUR 200 per month"

What is that concretely, that you spend 2400 EUR a yera?

What kind of further training?

Nobody either spends 100 EUR y month for dictionaries. At least you want to buy a whole book store.

To have a car is luxury. One doesnt need it necessary.

No one either lives in house alone. So if you have a house or flat, where you 800 EUR a month, it means normally, that you share your costs with someone else and pay only 400 EUR.

I think you should calculate it again.


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Tomás Cano Binder, CT  Identity Verified
Spain
Local time: 20:17
Member (2005)
English to Spanish
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Expenditure in dictionaries Aug 1, 2008

erika rubinstein wrote:
Nobody either spends 100 EUR y month for dictionaries. At least you want to buy a whole book store.


Well, indeed if we spent Eur 100 a month in dictionaries, I reckon we would now have some 250 dictionaries, and we don't. We do have a quite comprehensive set of dictionaries in our areas of specialty, but only buy some 5-6 new dictionaries or reference books every year, at a cost in the range from Eur 150 to Eur 500. So EUR 1200 a year sounds a bit too much.

I recently bought 8 more books for our library, to strengthen it a bit more in an area. And spent roughly Eur 300. Before that, I reckon we haven't bought a new dictionary for over a year. So maybe a reasonable figure in our case could be Eur 300 a year in new reference books and dictionaries.

[Edited at 2008-08-01 10:24]


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Tomás Cano Binder, CT  Identity Verified
Spain
Local time: 20:17
Member (2005)
English to Spanish
+ ...
400 euros a month? Aug 1, 2008

Samuel Murray wrote:
Stationary, internet, phone calls etc = EUR 400 per month


Isn't this a bit overvalued? According to Tekom's webpage, you should be paying only some 33 euro (413 rand/month) for their fastest DSL connection.

How do you spend the other Eur 367? Telephone... Don't you have flat rate in South Africa? (I reckon most of us have one). Let's assume you spend (calling a lot) some ZAR 750 in telephone.

How do you spend the other Eur 280 in stationary?

Please explain!


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QUOI  Identity Verified

Chinese to English
+ ...
Interesting exercise Aug 1, 2008

I am no accountant but something tells me that this exercise will be more meaningful and indicative if the outgoings are looked at as a % of gross income. Someone may spend twice as much but also have a larger earning. It's the net income that counts. Wouldn't you agree?

Maybe the question should be asked in this way: On a monthly basis, how much do you have to spend in your country in order to make EURO 10,000 ?

[Edited at 2008-08-01 10:46]


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Tomás Cano Binder, CT  Identity Verified
Spain
Local time: 20:17
Member (2005)
English to Spanish
+ ...
Where can I get a VISA to live in South Africa? Aug 1, 2008

Samuel Murray wrote:
Income tax = 100

Total to break even = EUR 3 915 per month.


Monthly income tax Eur 100 for a monthly income of Eur 4K???? Please Samuel, do find a small detached house for my family of 4! I'm moving in next week!


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Daniel García
English to Spanish
+ ...
Keep in mind that we are talking about different countries Aug 1, 2008

erika rubinstein wrote:
To have a car is luxury. One doesnt need it necessary.


You can argue that having a car in Germany can be considered a luxury (assuming no children and assuming that you live a town and not in a small village).

Keep in mind however that having a car in other countries (like South Africa) is probably not a luxury but a real need without which you can't literally do many things.


I think you should calculate it again.


What would be useful and interesting is that you do the same calculations for Germany, rather than challenging the calculations for South Africa...

Daniel


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Charlie Bavington  Identity Verified
Local time: 19:17
French to English
Food? Utility bills? Aug 1, 2008

Just wondered how this translator manages to live more than about a week since they appear to spend nothing on food or water.

Does he or she power his or her computer using a hamster in a wheel or something? Lights? Hot water? Anything like that at all?

I suppose these things could come out of the not inconsiderable surplus there is bound to be in the dictionary budget....


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erika rubinstein  Identity Verified
Local time: 20:17
Member (2011)
English to Russian
+ ...
Of course I can talk definitely only about Germany. Aug 1, 2008

But I dont think, the difference is so big.

Our flat costs 860 EUR a month in one of the most expensive cities of Germany. It is a big flat. My husband and me share the costs. 860 EUR with water, gas, light and so on.

Telephone and computer flatrate - 50 EUR. And it is very expensive. You can have the same for 30 EUR.
Mobile phone about 30-40 EUR a month.

I buy dictionaries maybe once a year - 30 EUR.

No further cources, but I had my traslation exam at the Chamber of Commerce and had to pay 300 EUR. And further on 240 EUR for becoming a certified translator. I will also invest more maby for an ad in the Yellow Pages. But it is for the first time in my life.
We dont have a car, though i have a little child. I live in the center of the city. But if you dont live in the center or live outside, so you pay less for the flat.

I pay 70 EUR for the medical insurance. It is a Germam speciality for freelances. I will not get get any pension, when I am old.

So together: about 600-700 a month.

Maybe I forgot something?


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erika rubinstein  Identity Verified
Local time: 20:17
Member (2011)
English to Russian
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I forgot in fact. Aug 1, 2008

Monthly ticket for the transport: 40 EUR.

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Samuel Murray  Identity Verified
Netherlands
Local time: 20:17
Member (2006)
English to Afrikaans
+ ...
TOPIC STARTER
Some notes Aug 1, 2008

Well, if I had been a little liberal in rounding the figures, let's adjust them down.

And remember, the point of the exercise is not to determine what we do live on, but what we should be living on. I don't spend this much at all, and in fact, I tend to save money whereever I can. For examle, I don't do maintenance on my car as often as I should like. I don't buy as many dictionaries and referenec works as I believe a translator should. I don't.

erika rubinstein wrote:
"Stationary, internet, phone calls etc = EUR 400 per month"
I pay maximum 100 EUR a month


Tomás Cano Binder wrote:
Isn't this a bit overvalued? According to Tekom's webpage, you should be paying only some 33 euro (413 rand/month) for their fastest DSL connection.

How do you spend the other Eur 367? Telephone... Don't you have flat rate in South Africa? (I reckon most of us have one). Let's assume you spend (calling a lot) some ZAR 750 in telephone.


We pay for landline rental (R150), for DSL rental (R200), for DSL bandwidth (R400), for cellphone contracts (R400), for telepone calls (R0.65 per minute landline, R1.50 per minute cellular).

Remember, the R413 you see on Telkom's site is for DSL rental only -- it doesn't include bandwidth. So if you pay R100 per gigabyte, and you use 4 GB per month, that's an additional R400.

Stationary costs include printer cartridges etc (BW R700 for inkjet, R500 for laser, colour R750 for inkjet), paper, snailmail requiremets etc.

If we have less money to spend, we tend to spend less. If there isn't enough income to justify making printouts of our work, we'll compromise and do our editing/proofreading on-screen. And so we save here and the save there.

"Marketing and related = EUR 200 per month"
What is that concretely, that you spend 2400 EUR a yera?


Again, we tend to let our spend be dictated by what we can afford, which IMO is not the way it should be. Have you ever investigated what an advert in the newspaper, adverts in trade papers, and listing in various directories cost? Well, I think translators can save on these costs by clubbing together.

What kind of further training?


Well, a bachelors degree is 3 years, a post-graduate translators' diploma is another year, so if you want to get your honnours degree, you can study it over 2 years part-time.

Nobody either spends 100 EUR y month for dictionaries. At least you want to buy a whole book store.


Well, indeed if we spent Eur 100 a month in dictionaries, I reckon we would now have some 250 dictionaries, and we don't.


Well, I suspect the reason for spending so little on reference works is because the budget for such works is typically very low. Yet reference works is one of our tools of the trade. I don't think it is excessive to set yourself a goal to buy one dictionary and two reference works per month. But... I've met translators with no more than 5 dictionaries, and they think they have many!

To have a car is luxury. One doesnt need it necessary.


I'm not saying we should live in luxury, but on the other hand we shouldn't buy only that which is absolutely necessary for survival. But it depends on your country and your situation, I think. If you live in a small country with excellent public transport, then you won't need a car. As for me, if I were full-time freelancing, it would not be excessive for me to travel 1000 km per month to clients.

In my country, public transport is for commuters who work in industrial regions. It is not possible to conduct a business using public transport here. I myself tried for a few months to commute to my place of work, using a variety of public transport options, and it was just impossible. I typically spent 7 hours of the day travelling, and I was just commuting (not visiting different places). Sure, it's cheaper -- taking the train from my house (Johannesburg) to my place of work (Pretoria) can work out to less than R30 a day, but you spend 7 hours on the road and it is unrealiable too.

These days I have a motorcycle. I spend about R60 a day on petrol, and it takes me 3 hours of travel per day. In a car it would take me 4 hours. But I can't transport much on a motorcycle and if I had to ride in midday, I'd arrive at my destinations reeking of sweat.

No one either lives in house alone. So if you have a house or flat, where you 800 EUR a month, it means normally, that you share your costs with someone else and pay only 400 EUR.


By "house" I mean "accommodation", but yes, the most common form of accommodation in my country is a house. Personally I don't think you can run a business from a house that you share with a stranger. But different countries are different. In some places, housing is so scarce that no-one would dream of living alone in a house. Where I'm from, housing isn't scarce, although it is expensive.

Also different countries have different value systems with regard to buy versus rent. In my country it is generally regarded as a waste of money to rent, because you don't get capital growth on your investment. The only people who rent, are those who can't afford to buy... and if you can't afford to buy, then perhaps you are not really a business person.

I think you should calculate it again.


Certainly. Let's shave 30% off all my estimates. That gives us a "fair" per word rate of EUR 0.65 per word. Is that fair?


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Samuel Murray  Identity Verified
Netherlands
Local time: 20:17
Member (2006)
English to Afrikaans
+ ...
TOPIC STARTER
More responses Aug 1, 2008

Tomás Cano Binder wrote:
Monthly income tax Eur 100 for a monthly income of Eur 4K???? Please Samuel, do find a small detached house for my family of 4! I'm moving in next week!


Don't forget that most expenses are tax deductible for freelancers. Even for salaried folks, some things can be deducted. Eg all money spent on paying interest on a home loan is deductible, and in the beginning, that'll be over 90% of your monthly bond. When you sell the house, that's when they hit you hard with capital gains tax...

Charlie Bavington wrote:
Just wondered how this translator manages to live more than about a week since they appear to spend nothing on food or water. ... Does he or she power his or her computer using a hamster in a wheel or something? Lights? Hot water? Anything like that at all?


That's where "salary" comes in. You didn't think the EUR 800.00 was all pocket-money, did you?


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Cristiana Coblis  Identity Verified
Romania
Local time: 21:17
Member (2004)
English to Romanian
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Some answers Aug 1, 2008

Samuel Murray wrote:
Hours per month = 100 (not counting time spend studying and doing marketing)
Therefore, translator must earn EUR 40 per hour.
If he translates 500 words per hour, his rate should be EUR 0.8 per word.
Add 25% for a proofreader, then that's EUR 1.00 per word, and that would be a fair rate for him.


40 euro per hour is a reasonable rate, but that gives around 0.08 per word (not 0.8) if you calculate 500 words per hour. Usually, I charge more for translation and also between 30-50% for revision by a peer, 0.08 being what I would charge for a general no-frills, no-thrills text.

Leaving that aside, I will answer some of your questions.

Initial debt (pay off over 5 years):
Total: EUR 475 per month
What would the initial debt be for a translator in your country?

Well, in my country, if you are lucky (i.e. your grades qualify you for a no-tax spot), you do not have to pay a tax for your first university and master's degree trainings (that's my case), however most people pay some taxes, but it's usually around 600 euro per year. In my case, the costs for university and master's degree training were very low, because I also had a scholarship that covered part of my costs. I probably spent on my education less than 2.000 euro total, but I was very lucky. BUT I would not evaluate my training in monetary terms. A degree in translation plus a master's degree in a specialised area gives you the right to ask for a good rate because of the qualifications and knowledge acquired, not because of what the costs were. In my case, I would say the initial debt was around 450 a year max. Based on your calculation, if I am correct, in your example you should add a zero


Running costs:
Stationary, internet, phone calls etc = EUR 400 per month
Marketing and related = EUR 200 per month
Further training = EUR 12 000 for 2 years (i.e. EUR 100 per month)
Dictionaries, workshops etc = EUR 100 per month
Total: EUR 800 per month
Are these reasonable running costs for a translator in your country?

Stationary, internet, phone - around 100 euro counting high-speed Internet, two phone lines and mobile phone bill.
I don't spend 100 euro/month on dictionaries and specialized books either, although I buy a lot of dictionaries and books, these are relatively cheap in my country.

What does transport cost in your country?

I do not need a car, I mostly use a taxi to get around or to pick up my son from school, which is not exactly business-related.

Not all countries have a buy culture -- some can only rent. What is a reasonable rent for a translator in your country, with a home office?

In my country there is a strong buy culture. I live in a medium sized house in the city center, but although I work from home, this is a family property and I do not factor this as a business cost because rent would be huge here and the value of the house even larger - if I factored this in my rate I would probably not get any work at all. I have a room that I use as an office and I calculate the portion of utilities that I pay for that room as business expenses - this is the rule in my country.

Medical and pension= EUR 500 per month
A reasonable beginner's salary = EUR 800 per month
Income tax = Add 20% to all non-deductibles
Do you think these numbers are reasonable, if compared to your country?

Insurance, medical and pension are lower in my country, I have a good insurance and two pension plans and I only pay around 200 euro total per month. Most people do not pay that much. Salary would be lower in my country and income tax is 16%.

If his minimum *fair* rate would be EUR 1.00 per word, what should be absolute minimum unfair rate be? Would you survive if ProZ.com caps the minimum rate at half of that, at say EUR 0.5 per word?

Again, it would be 0.10 and 0.05 respectively in your example. However, I think ProZ.com does not have any plans or any right to recommend or fix rates for translators at any level, regional, national or international. In EU this is forbidden by a number of treaties and regulations and price interventions of any kind are illegal in most countries. Studies, surveys and statistics are OK but they are in no way binding to anyone.

Best from Cluj.


[Editat la 2008-08-01 11:44]


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Noni Gilbert
Spain
Local time: 20:17
Member (2007)
Spanish to English
+ ...
Dictionary snacks Aug 1, 2008

Charlie Bavington wrote:

Just wondered how this translator manages to live more than about a week since they appear to spend nothing on food or water.

Does he or she power his or her computer using a hamster in a wheel or something? Lights? Hot water? Anything like that at all?


I have found that chewing on a sheet or two of the Spanish-Spanish DRAE stops the incessant rumbling of my stomach for a while...

Sorry to be flippant over what is indeed a serious topic, but it was good to have a giggle and Charlie is good at making me do that.

Leaving OT aside wistfully, it is of course very valuable to take a serious look at the reality of our running expenses as translators, and a template to fill in for various countries would be extraordinarily useful. Any economists out there with time on their hands? I am aware that Proz already offers some guidelines for calculation, but maybe it is time to update them / improve them / broaden them.


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erika rubinstein  Identity Verified
Local time: 20:17
Member (2011)
English to Russian
+ ...
Not stranger, you wife or partner. Aug 1, 2008

[Personally I don't think you can run a business from a house that you share with a stranger.]Samuel Murray wrote:

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