I’m sure many of you went to art school and I’m assuming most of the people reading this article are designers, illustrators or others working within the world of what we reluctantly call “communication art”. When we graduated from art school, a career was promised to us. We wouldn’t spend our days covered in grape jelly, masturbating before crowds to win a spot at the Whitney Biennial—we would live normal lives, work at offices, bask in the glow of our computers. We would have stability and wouldn’t have to worry about how our “art” would pay the bills. Our parents were happy, we were happy, our fine-art friends called us sell-outs and all was right in the world.

We found our first job. After a couple years we wanted a change of pace and found a new one. Things were good. Life was easy. Mornings were spent perusing cute overload before the coffee kicked in. We designed without ever having to really deal with clients, invoicing, negotiating—all the icky businessy stuff that bums everyone out. Our left-brain atrophied.

Then one day we woke up with the itch. It became more and more powerful as we dragged ourselves to work on blizzardy days or suffered through hangovers under fluorescent lights and drop ceilings. At 7am, half awake under the weak arc of water emptying from our shower head we said to ourselves “I’m going to do it! I’m going to go freelance!” We threw on a towel and the world felt sparkly and new. We’d make our own hours! We’d sleep until noon if we wanted to! We’d no longer worry about using up all of our sick days. We’d be in control! (The freelancers reading this are without a doubt rolling their eyes at the naiveté we all once possessed). We gave notice at work and a few weeks later our dream was a reality. As time went on though, we realized this reality was not always a dream come true.

Now we were more than creatives, we were business people. If we were one of the lucky ones, we picked up enough client work to keep us from retreating, tail between our legs, to our previous lives as employees. We completely fucked ourselves over on those first few jobs but eventually cobbled together a relatively good standard contract and learned to say enough is enough after the 10th round of revisions. This is not the stuff we learned in college. If you even thought about contracts and invoices before that art school diploma hit your hand I commend your professors, but most of us were off in la la land developing identities for fictitious products, complaining about how we only had seven weeks to get that logo right.

You can learn a lot of the business end of design and illustration by trial and error and reading articles and books, but one thing that is seemingly impossible to get a grasp on is pricing. Whether you are a student, a young designer, or a seasoned pro, pricing jobs can be one of the most frustrating parts of the creative process. The cost of creative work is shrouded in mystery and very subjective. While it makes some people uncomfortable to talk about art and money together (as we all know creatives are really meant to suffer through life and die penniless), they are incredibly similar when you think about it. What is money other than dirty rectangles of pressed tree pulp? Because we all believe it has value it is valuable.

I know you’re all dying for me to get down to brass tacks and explain how to price for each and every design situation, but what follows won’t be anywhere close to a definitive guide, just some of my own opinions and words of wisdom on how to avoid screwing yourself and the rest of us over by doing too much work for too little pay. We’re in charge of assigning value to what we do. Alright, here we go!

Pricing hourly punishes efficiency.

So this is a pretty bold statement and like any bold blanket statement it should be taken with a grain of salt. Hourly pricing can be incredibly advantageous in certain circumstances, like when you receive that first email from a potential client and, through their thousand word introductory essay lousy with emoticons and unnecessarily capitalized words, they paint a clear picture that they are completely batshit insane. You know that there will be MANY rounds of revision in your future and that over the course of working together you’ll be as much a therapist as a designer. Totaling those 500 hours at WHATEVER your hourly rate is will equal a pretty good pay day.

It’s more than just crazy people that can make hourly pricing worthwhile though—pricing any long term design project hourly can be advantageous, as long as you communicate clearly along the way what kind of hours you’re devoting to the project. If the first time your client sees your total hours is on the job-concluding invoice, a world of hurt awaits. It will be like being audited except somehow more unpleasant. Be prepared to forward them every approving email, to itemize every minute spent on the website / book / whatever.

Pricing hourly seems much easier than flat rate pricing, but because you have to give clients a ballpark full-cost price upfront (the total hours you plan to work x hourly rate), you can end up in a very tough spot if you don’t have a firm grasp on how long it takes you to do things. You’re nearing the halfway point in the project and are already over the total hours you’re contractually committed to. What does this mean? It almost never means that you’re paid double your original fee. Even if you can eek out a little extra money from the client, by the end of the project your hourly rate will look more like the one you were earning at the Blue Comet Diner at age 16.

So once you have a grip on your work flow and become more and more efficient, hourly pricing makes perfect sense, right? You know how long it will take you to do something, you price for it, everyone is happy. Unfortunately this is a half truth. Sure you’re getting paid well enough and certainly making more hourly than you probably were at your old day job, but I’ll paint a picture as to why this is a flawed pricing model: Two designers are hired to produce posters for a music festival. Both have the same hourly rate of $100 per hour (a reasonable rate for someone that’s been in the biz for a few years and has a few accolades under their belt), but one designer works much faster than the other. Both are equally talented, but one is far more efficient. At the end of the job, the designers turn in their invoices—he worked on it for a total of 18 hours and she a total of 7 hours. He is paid a respectable fee of $1800 and she $700 for producing the same result. Your rational mind says “Well, he did work more hours than her…” but part of you knows that this isn’t completely fair, and that part is correct. This becomes epically clear when working for big name clients.

Here’s another scenario: You’re hired to do a monogram for a giant international company. They’ll want to use this monogram on everything from price tags to billboards to TV spots and they want to use it forever (in perpetuity until the sun explodes). They have a pretty clear idea of what they want and you know that it will take about 10 hours total with the initial exploration, back and forth revisions, and finalizing. Even if your hourly rate is $250 / hour (a pretty high rate), the total you’re earning for that logo is $2,500. If you think that is a good price for a professional designer to earn crafting what is essentially a logo for a huge company, you are mistaken. So if you aren’t pricing hourly, how DO you price?

Licensing and Rights-Management

So while pricing hourly has its disadvantages, it’s a good place to start. Most designers take into account the hours they’ll put into a project when coming up with a price, but the seasoned professionals use it as part of the way they quote a project, and not as the only defining factor. Once you feel comfortable with your hourly rate and can somewhat accurately predict how long it will take you to do something, there are a few other things to consider that will boost your prices and turn this design hobby of yours into an actual sustainable career.

As a designer, when you hear the term “rights-management” it takes you back to your intern days doing photo research, trying to find non-awful royalty-free images after your boss told you all the rights-managed photos were way too expensive. How does rights-management apply to a designer or illustrator? Photographers aren’t the only ones able to manage the rights of their work. You inherently own the rights to anything you create, this is why it’s INCREDIBLY important to read every contract for every job. Often times clients want more rights than what they are willing to pay for—the biggest red flag word being “work for hire”. This means that the client owns all the rights to anything you create for them. They essentially, legally, become the author of your work.

As a graphic designer, work for hire is a bit more acceptable in many situations since you’re not authoring new content as much as creating a beautiful context for other people’s content (speaking specifically about any sort of layout design). Where rights management usually comes into play is in the context of identity work, and this is why logos are priced the way they are. It’s understood that the clients will need the rights to the mark you create so that they can trademark it and use it on unlimited applications, so when pricing for a logo you should take that into account. In addition to a fair hourly rate, clients pay for the rights to use that logo in an unlimited capacity.

Aside from giving away all the rights to your work for an additional (hopefully ginormous) fee, you can give them away for limited periods of time or for limited applications by licensing work to clients. There are fewer ways to do this as a graphic designer, but licensing is an incredibly (incredibly!) important part of being an illustrator or letterer. Of the couple hundred client projects I’ve done over the past few years, very few of them have required a full buyout of all rights, and the ones that have required them paid my rent for the better part of a year. Here are some factors that go into pricing a job based on licensing:

• How long does the client want to license the artwork for?One month? One year? Two years? Five years? In perpetuity?
• In what context is the artwork going to be used?Do they have the rights to use it on anything? In print only? Web only? Broadcast? Tattooed on their faces?
• If the job is reprinted, will there be an additional fee for a reprint?
• Do they want an unlimited license or do they need to own the rights?
• Are these rights transferrable if the company is sold?
• What kind of company is it?Is it for a Mom-and-Pop business, a multi-billion dollar corporation or something in between?

By now your head must be spinning. This is some complicated stuff right? Maybe, but this is how you can actually make a living doing illustration and design and maybe even eventually quit your but-they-give-me-health-insurance barista job. What follows is a fictional pricing example to show how powerful licensing can be. I’m going to write it in the context of lettering, which is priced essentially the same as illustration. Graphic designers should still pay attention though, because when I talk about buyout pricing, that’s essentially what you’re going to be thinking about when pricing logos. My price points will be higher than what a fresh faced n00b can probably charge, but should at least illustrate how much of an impact licensing can have on the cost of artwork.

The Correspondence

They didn’t give me much to go on here aside from the actual work I’m creating. It sounds like a cool job, but I’m going to need to do some investigating before giving a proper quote. The biggest young designer mistake here would be to quote a flat fee without finding out what kind of usage rights they want.

Usually here they’d write back with some very very specific uses in mind which makes it a bit easier to quote, but sometimes you’ll get a letter that looks something like this:

What We Know

• This is for a big international clothing company.
• They are gathering prices from a few different people.They’ll present several artists to the client who will chose based on style or lowest price depending on what the client’s priority is.
• They want a price for presentation only.This means you create the artwork and they only have the right to show it around in-house and to the client, NOT to use it in any way for their campaign.
• They want a number of usage scenarios.This is on top of that initial creation / presentation fee.

Pricing for Presentation

If you’ve done any editorial illustration work (magazines and newspapers), you know that the rates are pretty standard across the board: $250-$500 for a spot illustration, $500-$750 for a half page, $1000-$1500 for a full page, $2000-$3000 for a full spread, $1500-$3500 for a cover. These are all pretty normal prices and there are of course magazines that pay higher or lower. I tend to start with these prices in mind when thinking about pricing for “Presentation Only”.

They want a five word phrase that is highly illustrative, which equates to “a full page illustration” or so. Because this is for advertising and not editorial, adjust your rates depending on the client. This is for a big company, so my presentation only fee might be somewhere around the $5000-$7000 mark depending on how complicated what they’re after actually is. If this was for a smaller company, the presentation only fee might be closer to $2500 or $3500.

Sample Usage Scenarios

If a client doesn’t tell you specifically what usage rights they need, you should make sure there is a good range represented. In this situation, I’m definitely going to price based on the length of time they need it, plus some general examples of what context the artwork will be used in. When you send your quote, it should be broken down as clearly as possible so there is no confusion as to what the clients are paying for in each stage of rights licensing. This would be the quote I would send back:

So this is a pretty basic breakdown, but it gives the agency/client a lot of price points to consider. If I wanted to break it down even further, I would price based on 2 year and 5 year use and give different prices for U.S. only, North America only, etc. Most importantly, note that all of the usage scenarios are ON TOP OF our original presentation only / artwork creation price. The prices are not cumulative in this example quote, so each +$ is only added to the presentation fee. The top price in this scenario is $32,000 (I saw there was some confusion in comments so thought I’d clarify). These prices might seem completely outrageous to you, but they’re actually pretty reasonable when we take into effect who the client is and what kind of rights they’ll probably need. If you’re an up-and-comer, your prices might be a bit lower but the percentage markup should remain about the same. Imagine if we had priced this hourly!

How do you know if you priced right?

If the client writes back immediately and says “These numbers look great! We’ll send along a contract for you to go over in a few days!” It probably means your prices are too low. If they write back and try to negotiate you down a little bit, you were probably pretty spot on, and if they write back and say that this is well beyond their budget, you get to decide whether or not you want to figure out a way to work within their budget or whether you want to walk away and take one for the team. When you’re offered a very low budget by a very huge client, you can always feel good about turning it down knowing that you are helping to raise the standards of pricing for others.

Why doesn’t anyone ever talk about pricing?

There are a lot of reasons why designers and illustrators are reluctant to talk about pricing, the most obvious being that no one wants to shout their annual income to the masses. Once you start giving away your general prices, it’s not incredibly difficult to add things up and figure out a ballpark of what an individual or company makes in a year. A personal note: don’t assume that the pricing structure above means that I’m swimming in a pile of money. My half-retired dentist father still makes more than I do. The fake job I used as an example above is an advertising job, and I used it as an example because pricing for advertising is one of the darkest arts of all. There are WILD differences in pricing from presentation to buyout, and a ton of factors that affect the price. It’s great to surround yourself with friends or more experienced designers that can help you price a job. You can always consult The GAG’s Ethical Guide for Pricing, but definitely use it for ballparking more than definitive numbers.

The Pricing Domino Effect

It’s incredibly important for even young designers to always quote respectable prices. It can be very tempting to create artwork for a “cool” company for very little pay and the promise of insane exposure / an incredible portfolio piece. Every successful designer and illustrator has at one point succumbed to the siren song of the “cool” industries (there are a few “cool” companies that don’t try to take advantage of designers but they are the exception and not the norm). When you are starting your career as a freelancer, it will be INCREDIBLY tempting to take on any work that comes along, no matter how unfairly companies are trying to compensate you. Remember that you are talented and that your talent has value and that ultimately it is up to you to determine how much people value your talent. By helping to keep pricing standards high, you not only help yourself by avoiding the title of “The Poor Man’s Marian Bantjes” (essentially the creative equivalent of a knock-off handbag), you also help every other young designer struggling to get paid out there, and help every designer that came before you to continue making a living doing what they love.

A footnote for the haters:

For whatever reason, whenever anyone writes an article like this—asking designers to raise the standards for themselves and others, calling out companies for unfair pay or empty promises—there are always a few anonymous contrarians that berate the author for preaching from an ivory tower, not understanding what the masses are actually going through. I have been lucky enough to have success in my career, and I want to use the knowledge I’ve gained to help others have success. Why anyone would complain when someone is advocating for better wages, I do not know, but it always happens.

As I’ve seen my Should I Work for Free chart get reposted around the internet a bit, there is a topic that is always brought up in comments that I didn’t address on the chart itself: internships. I purposefully avoided talking about them on the chart, just as I avoided diving into great detail about non-profit work—because both are pretty complex matters. When it comes to non-profit work, I know several designers that make their entire living working at or doing freelance for non-profits. On the chart, I wanted to get the point across that most non-profits are legitimate businesses and that while they aren’t declaring profit at the end of the year, they still have expected operating costs and your design work should not necessarily be left out of the mix. I’m already on a tangent though, so let’s get back to the issue at hand.

When I was in college, my university wouldn’t give you academic credit for an unpaid internship. Local design studios knew this, and knew that if they wanted an intern from Tyler School of Art, they would have to fork over some cash (albeit very little cash). It worked out great. Of the three internships I had in college, all were paid. That doesn’t mean I was raking it in, but I was able to change my humble diet of ramen to…pasta.

There is (and has always been) a giant trend to compensate interns in “experience” alone. It’s one thing for a 18-year-old that has never opened Photoshop to walk into a tiny design studio and expect little or no compensation, but the more I talk to young designers struggling to get work, the more I see people in their early and mid-twenties (most with bachelor and graduate degrees) having to settle for unpaid internships in their quest to find a real job. These are people with real skills and they are being taken advantage of. Everyone knows that you won’t get rich from an internship, but companies (even tiny ones) can afford to pay you something for your time, even if what you’re being paid amounts to little more than minimum wage in a city like New York. The big argument you’ll hear against paying interns is that you are learning a lot from the company or designer you’re working for and that their time is so valuable that they are working at a loss to educate you. This is complete bullshit. Well, maybe not complete bullshit but definitely a hearty serving of it.

If you’ve ever had an internship, you know that many of your duties revolve around doing things that other people really don’t want to do—from general office and gopher work like shredding papers, organizing, standing in line at the post office, and getting coffee, to the slightly more design-industry-related stock photo researching. In my opinion, this is the stuff you should definitely be getting paid for. I’m sure someone could argue that you learn something by hovering over a trash can for three hours to the discordant buzz of a shredder, but seriously. Pay that person. Reward them monetarily for being your tedium slave. However you verbally package the skill set they’re building while doing your chores, you are delusional if you think they enjoy it.

Where it gets a bit tricky is when interns are actually doing something of value for a company. Many of you readers will jump in here and say “Well you’re practically an employee! You should be paid as one!” This is true, especially if you are working enough hours that it becomes difficult to have a second pay-the-bills job, but it’s a bit more nuanced than that. You are doing things that are employee-like—converting Quark files to InDesign files, archiving, prepping files for the designer to send to print, maybe even doing some light design work that will most likely never be shown to the client. Should you be compensated for this? Yes, of course. Again, I think interns should be monetarily compensated no matter what. But as you know, money isn’t everything and the most important part of any internship or junior level job should be the experience and knowledge you take away.

I know you all picked up your pitchforks at the of the word “experience”. Like “exposure”, “experience” can be a very toxic word when used by the wrong person. We’ve all at one point had a job or freelance gig that offered this intangible payment in lieu of real money. Some of us lucked out and actually received a wonderful education, and some of us walked away with an in-depth knowledge of copy machine maintenance. The thing is, anyone heading into an internship absolutely wants experience. If you aren’t looking to learn something and improve your skills in every job you have over the course of your career, you have probably found yourself in the wrong industry. But before you agree to a low paying job, examine what you’ll actually be learning there. Sometimes that experience is very valuable, especially if your employer takes a lot of time to personally educate you—it’s almost like getting paid to go to grad school.

It can be very difficult to have this kind of one-on-one education at a larger company. If you’ve ever interned for a company with more than 50 employees, you know that generally you’re not getting the attention of a supervisor for more than an hour or two every week. That’s not to say there aren’t exceptions to this rule, but (for the most part) a supervisor willing to spend quality facetime with you—time spent actually educating you and critiquing your work—is as mythical a creature as the unicorn. Your job as the office intern is to help out and demand as little time as possible from your employer. The education you’re receiving has more to do with office politics than design. In exchange for this, for being the unseen helper cog in the company machine, you should be paid and paid fairly well.

Employers: before you get in a big huff, I’m not saying you need to pay interns in gold bricks. There is a giant chasm between what interns are usually paid and what qualifies as fair wages in a big city. Have a few less fancy coffees in a week and you can afford to pay an intern ten dollars an hour. Also, we can totally see through the full-time jobs disguised as “internships”. You’re not fooling anyone.

Future Interns: Should you ever take an unpaid internship? I’d advise against it. The reason why there are so many unpaid internships is because so many people are willing to work for free. My university didn’t allow its students to take unpaid internships and by doing so forced local businesses to offer paid internships if they wanted to employ one of its students. Someone has to step in and say “this is the standard and what you are offering is below the standard” before anyone will stop and take notice. Should you take a lower paying internship that offers more hands-on training experience and one-on-one time with a supervisor? In my opinion, yes absolutely. While you should be compensated something for the work you do, your employer’s time is valuable, and if they are taking time to give you a proper education, the lower pay can be well worth it.