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Proposing FWR = Fair Word Rate
Thread poster: Heinrich Pesch
Tomás Cano Binder, BA, CT
Tomás Cano Binder, BA, CT  Identity Verified
Spain
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Exactly! Aug 24, 2016

John Fossey wrote:
Translators are practicing a profession. Do professionals typically earn an "average" income? IMO, translating is a demanding and highly skilled profession that should earn above the "average" income.

Totally seconded.


 
Georgi Kovachev
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I would change Heinrich's formula as follows: Aug 24, 2016

FWR(X) = (Desired monthly income/(2000 * 20))/75%.

If you work 15 days per month on average, then your workload would be 75% (15/20) of your productivity – I suppose every professional translator takes account of the time spent on each project. If you work 17 days per month on average, your workload would be 85%, 65% if you work 13 days per month, and so on. The formula could be changed accordingly.

If you want to earn 30% more than the average in a country, e.g. 1,30
... See more
FWR(X) = (Desired monthly income/(2000 * 20))/75%.

If you work 15 days per month on average, then your workload would be 75% (15/20) of your productivity – I suppose every professional translator takes account of the time spent on each project. If you work 17 days per month on average, your workload would be 85%, 65% if you work 13 days per month, and so on. The formula could be changed accordingly.

If you want to earn 30% more than the average in a country, e.g. 1,300 currency units, the average being 1,000, then the FWR would be (1300/(2000*20))/75% = 0.043 currency units.
For Germany the FWR would be $0.15 (4521/2000*20)/75% — $3,478 is the 2015 monthly average wage + 30%). I wish I worked for that rate
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Georgie Scott
Georgie Scott  Identity Verified
France
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French to English
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Being fair on clients Aug 24, 2016

I understand the premise but, despite the obvious serious problems with rates in the industry, I don't think we're in quite the same difficult position as certain farmers living in poverty in various third-world countries.

I think it's very easy as a conscientious person to feel hesitant about asking for rates higher than a "fair world average". However, rates for translation need to take into account the reality of being self-employed (which means our real wages are obtained by div
... See more
I understand the premise but, despite the obvious serious problems with rates in the industry, I don't think we're in quite the same difficult position as certain farmers living in poverty in various third-world countries.

I think it's very easy as a conscientious person to feel hesitant about asking for rates higher than a "fair world average". However, rates for translation need to take into account the reality of being self-employed (which means our real wages are obtained by dividing actual rates in two to account for all the benefits you would receive as an employee, such as paid holidays, sick leave, being paid during down time and equipment) and the needs of our clients.

It is beneficial for our clients to work with translators that are in a position to earn a return on their investment in their past education and to further invest in their continuing professional development (and equipment, providence, etc. etc. etc.). Translation is not a suitable first job so translators shouldn't be accepting rates that correspond to someone just trying to get by. Rates should be a reflection of an ambitious, experienced professional looking to innovate and constantly improve the service they provide - language is constantly evolving and we must evolve with it.

I haven't misunderstood the question, I know we're talking about the lower limit, but I feel that the real debate should be about the upper limit. It is only then that the industry will make real progress and iron out the various problems affecting both clients and service providers.

Why don't we talk more about companies' margins and how much they should be investing in translation to get a good ROI? A large number of companies have already understood that they need to be paying €100-150 per hour for worthwhile copywriting. If they pay the same for translation will it pay off for them? Why wouldn't it?

Did you know that some companies pay A POUND A WORD just to translate English legalese into readable, customer-friendly English? Does marketing, advertising and PR add value? The UK's economy says it does.
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gayd (X)
gayd (X)
gross vs net income Aug 24, 2016

Heinrich Pesch wrote:

This came to my mind when I answered today a posting in the German forum from an Uzbek freelance translator.

What would be a fare rate?
First we should determine:
How many words we would expect an experienced freelancer would translate daily?

If we state a volume of 2000 words and 20 days for a normal month, then we should proceed and ask:

How much income a freelance translator should get in his country?
Should an average income be fair? If so:

FWR(X) = Average monthly income in country X / 2000 * 20

The average monthly income in a country we can take from Wikipedia. Purchasing power parity.

So if the average monthly income would be 1000 USD, the FWR would be 0.025 USD.


1000 euros, is it the gross income or the net income?
As a freelancer, you have to pay yourself for the contributions employers pay for their employees.
In some countries, the net income is only 50% of the gross income. So IMO, your FWR would
be 0.05 E/w and not 0.025. And it's the bare minimum, because I'm not sure you can get 2000
words to translate everyday during the summer.


 
gayd (X)
gayd (X)
a 0.025 USD per word rate to assist outsourcers to get at a rough figure? Are you joking? Aug 24, 2016

Heinrich Pesch wrote:
But a FWR would assist outsourcers to get at a rough figure.

Only outsourcers based in India/China offer this kind of rate.


[Modifié le 2016-08-24 12:00 GMT]


 
Heinrich Pesch
Heinrich Pesch  Identity Verified
Finland
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TOPIC STARTER
Statistical average income Aug 24, 2016

You have to take some figure, and I proposed the figure Wikipedia gives for each country.
https://en.wikipedia.org/wiki/Purchasing_power_parity
All business has ups and downs, but at the end of the year a fair income would be the average of that country, IMO.

The colleague from Usbekistan asked in the German forum, if we think 0.08 USD a normal word rate. I t
... See more
You have to take some figure, and I proposed the figure Wikipedia gives for each country.
https://en.wikipedia.org/wiki/Purchasing_power_parity
All business has ups and downs, but at the end of the year a fair income would be the average of that country, IMO.

The colleague from Usbekistan asked in the German forum, if we think 0.08 USD a normal word rate. I told him according to Wikipedia the PPP income figure would suggest, that he needs to translate monthly 6250 words for 0.08 USD to get at the average income. So I thought his rate is quite fair, don't you think?
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gayd (X)
gayd (X)
0.08 USD for translation+proofreading Aug 24, 2016

Heinrich Pesch wrote:

You have to take some figure, and I proposed the figure Wikipedia gives for each country.
https://en.wikipedia.org/wiki/Purchasing_power_parity
All business has ups and downs, but at the end of the year a fair income would be the average of that country, IMO.

The colleague from Usbekistan asked in the German forum, if we think 0.08 USD a normal word rate. I told him according to Wikipedia the PPP income figure would suggest, that he needs to translate monthly 6250 words for 0.08 USD to get at the average income. So I thought his rate is quite fair, don't you think?


it's 0.08 USD for translation+proofreading (ich übersetze Texte, Aufträge aus Deutschen ins Usbekische und zwar mit meiner Frau im sog. Unter Vier Augen Prinzip. Dafür bezahlt der Auftraggeber 0,08 UsDollar pro Ausgangswort.
meaning 0.08 USD for himself and his wife)
In Uzbekistan, monthly net salaries amount to far less than 400 USD/month. So it's not bad.

[Modifié le 2016-08-24 12:28 GMT]


 
Sheila Wilson
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One normal month doesn't make a career Aug 24, 2016

Heinrich Pesch wrote:
If we state a volume of 2000 words and 20 days for a normal month, then we should proceed and ask:

How much income a freelance translator should get in his country?
Should an average income be fair? If so:

FWR(X) = Average monthly income in country X / 2000 * 20

The average monthly income in a country we can take from Wikipedia. Purchasing power parity.

So if the average monthly income would be 1000 USD, the FWR would be 0.025 USD.

Sorry about the dreadful title, but what is a "normal month" and why, if it exists, would it be appropriate to use in the formula?

Think for a moment what an "abnormal" month would be:
Would it involve double the income? That's unlikely, as doubling an already average workload, and keeping it up for a month, is not really feasible.
Would it involve half the income? Quite likely, in a light month.
Would it involve zero income? Just as likely! Illness, training, sickness, maternity/paternity..., and how about holidays?

A salaried employee has everything above covered in their monthly pay packet. We must include these costs in our rate.
A salaried office employee probably uses, but does not pay for: office premises, furniture, computer equipment, stationery and other consumables. We must include these costs in our rate.
A salaried employee does not usually have to pay for: insurance, memberships, reference books, specialised software, accountancy service, Internet access... We must include these costs in our rate.
A salaried employee (in many countries, anyway) pays a lower rate of tax, lower social security contributions, and no tax on their place of work. We must include all of the extra expenses incurred by a freelancer in our rates.
A salaried employee in most countries benefits from job security or, at worst, some unemployment/sickness benefit. We must take out - and pay for - insurance, or we must save for that rainy day. Either way, we must include provision for it in our rates.


 
gayd (X)
gayd (X)
And pensions? Aug 24, 2016

And what about pension? You pay social contributions but it does not mean you'll receive a decent pension.
Employees get very good pensions compared to freelancers.
Sheila Wilson wrote:

Heinrich Pesch wrote:
If we state a volume of 2000 words and 20 days for a normal month, then we should proceed and ask:

How much income a freelance translator should get in his country?
Should an average income be fair? If so:

FWR(X) = Average monthly income in country X / 2000 * 20

The average monthly income in a country we can take from Wikipedia. Purchasing power parity.

So if the average monthly income would be 1000 USD, the FWR would be 0.025 USD.

Sorry about the dreadful title, but what is a "normal month" and why, if it exists, would it be appropriate to use in the formula?

Think for a moment what an "abnormal" month would be:
Would it involve double the income? That's unlikely, as doubling an already average workload, and keeping it up for a month, is not really feasible.
Would it involve half the income? Quite likely, in a light month.
Would it involve zero income? Just as likely! Illness, training, sickness, maternity/paternity..., and how about holidays?

A salaried employee has everything above covered in their monthly pay packet. We must include these costs in our rate.
A salaried office employee probably uses, but does not pay for: office premises, furniture, computer equipment, stationery and other consumables. We must include these costs in our rate.
A salaried employee does not usually have to pay for: insurance, memberships, reference books, specialised software, accountancy service, Internet access... We must include these costs in our rate.
A salaried employee (in many countries, anyway) pays a lower rate of tax, lower social security contributions, and no tax on their place of work. We must include all of the extra expenses incurred by a freelancer in our rates.
A salaried employee in most countries benefits from job security or, at worst, some unemployment/sickness benefit. We must take out - and pay for - insurance, or we must save for that rainy day. Either way, we must include provision for it in our rates.


[Modifié le 2016-08-24 13:03 GMT]


 
Samuel Murray
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David, the "1000" is for computational purposes only Aug 24, 2016

David GAY wrote:
Heinrich Pesch wrote:
So if the average monthly income would be 1000 USD, the FWR would be 0.025 USD.

1000 [dollars], is it the gross income or the net income?


I think you misunderstood what the "1000" means. It doesn't mean literally "1000". It means that the ratio of income to per-word rate is 1000:0.025.

For example, the OECD average income in the USA is $5800, so the FWR according to Heinrich's formula would be 5.8 x 0.025 = USD 0.145 per word. In Spain it is $3600 and in Portugal it is $2400, so Spain's HFWR would be 3.6 x 0.025 = USD 0.09 and Portugal's HFWR would be 2.4 x 0.025 = USD 0.06.

As for whether it is gross or net, well, the 1000:0.025 ratio refers to what the translator actually charges, so that's obviously before taxes (no translator charges his income tax as a separate line item on his invoices to clients, after all).

Heinrich suggested using the OECD statistics (which cover only a few countries, unfortunately), which is in PPP USD gross. But if you were to use a source that lists only net incomes, the ratio would still be usable. A site like numbeo.com shows raw USD disposable, for example, and it shows more countries than the OECD.

However, as others have indicated here, translators don't always earn an income all the time. It would not be inaccurate to assume that most translators do actual income-generating work only 2/3 to 3/4 of the time (the rest of the time is spent on admin, marketing, training and... waiting). Heinrich's "20 days" also assumes that translators take only 21 days holiday per year (including public holidays), which I think is a bit low.


 
Heinrich Pesch
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We are not equal Aug 24, 2016

If we compare freelance translators in different parts of the world, they might have the same grade of proficiency, experience, education and technical equipment, but:

the one in country A has to pay every month already USD 1000 for rent, must buy everything from the shop for hard money, pays perhaps 30+ percent income tax and 20 percent insurances etc.

the one in country B lives in a house built by her ancestors, with orchard, bees, vegetables, hens, some cattle, or if
... See more
If we compare freelance translators in different parts of the world, they might have the same grade of proficiency, experience, education and technical equipment, but:

the one in country A has to pay every month already USD 1000 for rent, must buy everything from the shop for hard money, pays perhaps 30+ percent income tax and 20 percent insurances etc.

the one in country B lives in a house built by her ancestors, with orchard, bees, vegetables, hens, some cattle, or if she does not own these herself, her mother does or a near relative, she grows her own wine, distills her own slivovitz etc.

So would it be fair to pay both the same rate?

That's why I think we need something like the FWR if we discuss rates.
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gayd (X)
gayd (X)
The HFR as defined by Heinrich is the rate needed to reach a 1000 USD/month turnover Aug 24, 2016

The HFR defined by Heinrich is the rate needed to reach a 1000 USD/month turnover (gross).
1) But turnover does not mean income. It's not the same at all because you have to pay social
contributions anyway.
2) Taxes are not to be confused with social contributions.
3)I doubt that the average (monthly???)income in
Spain is 3600 USD anyway. I understand he takes the PPA data but it's totally irrelevant. You need
to take the nominal minimum wage in the country
... See more
The HFR defined by Heinrich is the rate needed to reach a 1000 USD/month turnover (gross).
1) But turnover does not mean income. It's not the same at all because you have to pay social
contributions anyway.
2) Taxes are not to be confused with social contributions.
3)I doubt that the average (monthly???)income in
Spain is 3600 USD anyway. I understand he takes the PPA data but it's totally irrelevant. You need
to take the nominal minimum wage in the country, which takes into account the cost of living.
4) In many western northern European countries, 1000 euros/month is the minimum wage.

Samuel Murray wrote:

David GAY wrote:
Heinrich Pesch wrote:
So if the average monthly income would be 1000 USD, the FWR would be 0.025 USD.

1000 [dollars], is it the gross income or the net income?


I think you misunderstood what the "1000" means. It doesn't mean literally "1000". It means that the ratio of income to per-word rate is 1000:0.025.

For example, the OECD average income in the USA is $5800, so the FWR according to Heinrich's formula would be 5.8 x 0.025 = USD 0.145 per word. In Spain it is $3600 and in Portugal it is $2400, so Spain's HFWR would be 3.6 x 0.025 = USD 0.09 and Portugal's HFWR would be 2.4 x 0.025 = USD 0.06.

As for whether it is gross or net, well, the 1000:0.025 ratio refers to what the translator actually charges, so that's obviously before taxes (no translator charges his income tax as a separate line item on his invoices to clients, after all).

Heinrich suggested using the OECD statistics (which cover only a few countries, unfortunately), which is in PPP USD gross. But if you were to use a source that lists only net incomes, the ratio would still be usable. A site like numbeo.com shows raw USD disposable, for example, and it shows more countries than the OECD.

However, as others have indicated here, translators don't always earn an income all the time. It would not be inaccurate to assume that most translators do actual income-generating work only 2/3 to 3/4 of the time (the rest of the time is spent on admin, marketing, training and... waiting). Heinrich's "20 days" also assumes that translators take only 21 days holiday per year (including public holidays), which I think is a bit low.


[Modifié le 2016-08-24 13:35 GMT]

[Modifié le 2016-08-24 13:42 GMT]

[Modifié le 2016-08-24 13:43 GMT]

[Modifié le 2016-08-24 13:44 GMT]

[Modifié le 2016-08-24 13:55 GMT]

[Modifié le 2016-08-24 14:01 GMT]
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EvaVer (X)
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We should not encourage clients to underpay Aug 24, 2016

just because the translator happens to reside in a more or less low-cost country, so that this calculation is totally wrong. The rate should be at least comparable to the rates in the client's country. According to your reasoning, i COULD work at 0,03 EUR/word (without starving to death). But why should I, if the client is used to pay twice/three times that, depending on the market? And I don't think you would like me to do so in your respective home markets, especially in a pair like EN/FR.

 
Samuel Murray
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Yes, translators also have business expenses, but... Aug 24, 2016

Sheila Wilson wrote:
[Think about] illness, ... maternity/paternity..., and how about holidays?
A salaried employee has everything above covered in their monthly pay packet. We must include these costs in our rate.


Sure, but these things apply to salaried workers also. For example, salaried workers only get a certain number of paid sick days per year, and the value of those sick days are included in the cost-to-company (i.e. "gross") salary. So if the FWR is based on the gross salary, it should include those things automatically.

The key thing is that many freelancers are not aware that they should take this into account when comparing their income to that of their salaries colleagues. To find out what your salaried colleague earns per day, you should not divide his salary by [5 days x 52 weeks] but by [5 days x 52 weeks, plus 21 days holiday, plus 14 days sick leave, plus 30 days maternity leave, etc].

The advantage of a freelance translator is, of course, that if he wants to have better benefits than his salaried colleague, then he can simply raise his rate. But that would mean that we're no longer talking about a lifestyle that is "merely fair".

A salaried office employee probably uses, but does not pay for: office premises, furniture, computer equipment, stationery and other consumables. We must include these costs in our rate. ... A salaried employee does not usually have to pay for: insurance, memberships, reference books, specialised software, accountancy service, Internet access... We must include these costs in our rate.


That is true, i.e. there are business expenses. But I think the translator that Heinrich had in mind was one with a frugal life style. Any translator who wants to buy new furniture, new computers, new books, new software regularly must know that since his business costs are higher, he'd have to raise his rate. It is quite possible for a translator to pinch pennies and still maintain a professional service. Obviously not all translators want to do that, but if you want a more comfortable job, then you can no longer consider yourself average.

Still, some business expenses are unavoidable, and I agree that such costs should be taken into account when calculating a fair rate. The question is: how would you calculate a good guesstimate ratio for it?

A salaried employee (in many countries, anyway) pays a lower rate of tax, lower social security contributions, and no tax on their place of work. We must include all of the extra expenses incurred by a freelancer in our rates.


This may be true for some countries, yes. But if we are going to come up with a simple formula for a fair rate, we'd have to figure out a simple (yes: oversimplified) means of including that, possibly based on some aspect off some list of countries, or otherwise a constant sucked out of thin air.

[I tried to see if one could use lists of minimum and maximum income tax rates, but even that is problematic because different countries calculate income tax brackets differently. For example, in some countries, the lowest bracket is 0%, while in others, the lowest bracket is, say, 15%, but then there is tax-free amount, which means that low-earning people pay no tax in the end -- but on a list of countries this will show up as "0%" and "15%" respectively.]


 
Samuel Murray
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@Eva and @David Aug 24, 2016

EvaVer wrote:
We should not encourage clients to underpay ... just because the translator happens to reside in a more or less low-cost country, so that this calculation is totally wrong. The rate should ... [depend] on the market.


You're talking about market rates. Heinrich is talking about living wage rates. These are two different things, so the calculation is not wrong. The calculation is wrong for calculating market rates, yes, but that is not what we're trying to calculate, is it?

==

David GAY wrote:
The HFR defined by Heinrich is the rate needed to reach a 1000 USD/month turnover (gross).


1. Heinrich never mentions "turnover" in his initial post.
2. Yes, but Heinrich is not suggesting that USD 1000 is the ideal salary. The "1000" is just a round number to make calculating the actual rate easier.

2) Taxes are not to be confused with social contributions.


What do you mean?

3) I doubt that the average monthly income in Spain is 3600 USD anyway. I understand he takes the PPA data but it's totally irrelevant.


I agree that PPP is not a good measure, because the outsourcer doesn't want to know what PPP rate to pay, but what actual rate to pay (which will be converted into the translator's currency not via some PPP calculation but via normal exchange rates).

4) In many western northern European countries, 1000 euros/month is the minimum wage.


In my opinion, that is irrelevant to this discussion.



[Edited at 2016-08-24 14:33 GMT]


 
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