Billing by the word, by the hour, or by the project…what to do?

If you want to inspire fierce emotions in a group of translators, ask this question: is it better to bill by the word, by the hour, or by the project, and is the per-word pricing model on its way out?

Per-word pricing has historically been the norm in our profession. Per-word pricing has a few advantages:
-As long as the source document is countable, everyone knows up front exactly how much the translation will cost
-Faster translators earn more per hour, which encourages specialization, efficiency, and appropriate use of technology (and, perhaps, excessive speed, but that’s a different issue)
-The quoting process is very simple. How many words? OK, here’s your price. Done.

This model also has disadvantages:
-It positions translators as “piece workers,” rather than consultant-level professional service providers
-It opens the door to nickel-and-diming. I once had a potential client ask if I charged “for the little words.” (Only if you want them translated!). Translators who bill by the line or character may be subject to even more minutiae, such as whether the character count includes spaces
-It can lead to haggling over seemingly-tiny amounts of money that add up over time. If you translate 500,000 words a year–not atypical for a full-timer–a one-cent difference adds up to $5,000 over the course of the year

Per-hour pricing is more the norm in many other professional service jobs. My accountant, attorney, and web designer all charge by the hour. The issue is this: for whatever reason, many translation clients are resistant to paying an hourly rate that is the equivalent of the per-word rates they’re already paying. This is true of many of my agency clients: I earn, say, $75 “an hour” when translating for them by the word, but they offer, say, $40 an hour for editing–meaning that I only work for them when paid by the word.

At the risk of over-analyzing, this phenomenon has a domino effect. Because editing (for agency clients) is typically paid per hour, at a rate that is lower, and sometimes much lower, than the “hourly rate” that translators earn when paid by the word, many experienced translators avoid editing. Meaning that newer, less experienced translators are often brought on board as editors, which may or may not be a good idea.

Hourly billing also removes some of the incentives associated with per-word billing: there’s actually a disincentive to increase your speed by specializing, if that means that you do the same amount of work in less time.

My favorite way to bill is by the project. I do this with many direct clients. I feel that:
-It gives the client one number to focus on. How much is this going to cost? While…
-I can tweak the per-word rate a bit, to reflect the deadline, file format, research time, etc. without haggling with the client about this

Readers, any thoughts on this? Have you moved away from per-word pricing and toward something else? I ran this post in my newsletter and got some interesting answers, so I’m interested to hear what you have to say.

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10 Responses to “Billing by the word, by the hour, or by the project…what to do?”
  1. Simone L. April 25, 2019
    • Corinne McKay April 25, 2019
    • Corinne McKay April 25, 2019
  2. Mark April 26, 2019
    • Corinne McKay April 26, 2019
  3. Kerstin April 26, 2019
    • Corinne McKay April 26, 2019
  4. Peter Winslow April 29, 2019
    • Corinne McKay April 29, 2019

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