How much should I charge for freelance 3D modelling work? (Working out rates)
One the most troublesome issues to deal with when working independently relates to how much the freelance worker should be charging a client/customer for contracted work. Irrespective as to whether the request is for a contract position (short or mid term) in-house or just a one-off project found through a specific freelance website or generic community forum advert, ruminating over this and getting it right can be the source of a lot of stress and sleepless nights; is the quote too big, too small; was the time-frame over-estimated, ad infinitum until the wee-hours of the morning.
Calculating potential hourly or project rates isn't quite as arbitrary as it may at first appear because, thankfully, a number sources exist online can be used for this very purpose - working out freelance rates - it's just a matter of knowing where to look and how to use the data and information available.
Important Note: the following information is provided 'as is' and should not be construed as being either 'legal' or 'tax' advice on or for Freelance Employment, jobs or work. The Reader is therefore urged to seek, through appropriate channels, professional (certified) legal, tax and/or employment help where necessary. Search "Freelance Tax Advisors", "Freelance Legal Advisors", "Freelance Contract Advisor" (or similar term) for local representatives. Or ask colleagues or friends who they use/if they know any one that can assist.
what is being asked to be made? ^
Before getting to the root of the problem, the money, a moment needs to be taken to address some of the obvious and fundamental elements of any agreed-upon work; what exactly is the freelance individual being asked to produce. This 'stuff' matters because it is not wholly atypical to end up grudgingly producing more content than was originally requested because the client abuses the business relationship (the desire to put food on the table) to push for more than was agreed at time of project sign-off.
Note: it should be highlighted here that, as the saying goes, "verbal agreements are worth the paper they are written on" - "nothing" in other words. So whilst the freelancing individual can 'agree' to the production of content verbally or casually, doing so does not necessarily mean a binding contract has been made. It's very important to understand this point because the ramifications of 'verbal', 'casual', 'written', 'formal', and other forms of agreement, differ in the Real World™ - each can, and often do, imply differentiated interpretation of specific rights, responsibilities and obligations - this is why the suggestion to seek advice from a suitably qualified Legal, Tax and/or Employment professional specialising in freelance work is made, and why the individuals 'position' aught to be made explicitly clear from the start when carrying out work for other people.
It is important to clarify before quoting then, some of the general points about production; whether the project is to include textures and materials, ancillary assets or 'street art' (the items used to decorate a level/environment) and so on. If not, who is to provide these items?. Will they be made available to aid production? Does the client understand their absence may cause issues later on (scale, size, optimisation issues etc.)?. Where available, will they require cleaning up and/or optimisation for use?. All of which calls upon additional time, and increased expense, the client may not realise.
Note: ask questions and over time build a checklist from them which, depending on what type of work is usually undertaken, may be to ask...
What game engine is the content for
Are assets to be handed to others for further work
Are source files to be included
What software are they using/prefer to be used
Are there any specialist export requirements (special format)
How do they want to handle asset updates, edits and corrections
It's inevitable the client will forget something too, or unforeseen issues may crop up during production, so allowance needs to be made to cater to this else there's a risk of being out of pocket or past due-date. In the contract or agreement, position a statement to accommodate change after-the-fact, to the affect that "any additional work requested or required after sign-off may be subject to further (re)negotiation and (re)quoting (at the artists discretion.)" - this makes it clear to the client there is an awareness that 'things happen', and a pre-positioned clause is there ready to appropriately deal with these events.
Note: the key in such situations is to be flexible and mindful of the potential for tension to be caused even if everything discussed and required was agreed in writing - no-one likes to be wrong (even when they are) so be especially mindful of legal threats where items not originally included in the agreement are raised. This is why it's vitally important to, at the very least, have an email outlining poject requirements are clearly stated and the client has responded to that specific communication with "yes, go ahead with the work".
Industry sector salary comparisons ^
Once the basics of the project are known the next step is price the project up. Unfortunately when producing custom content freelancers do not have access to any publicly available resources containing a standard price-per-item list, largely because far too many project specific variables are involved when coming to an agreeing between parties.
Note: given the fact that "freelance" covers such a broad gamut of business related activities, and there are so many variables involved, it would be neigh on impossible to produce a 'catch-all' price list for a given type of freelance activity.
Having said this however, information to help set freelance rates is available indirectly looking at salary details within the industry sector the person might otherwise have been employed. For a 3D environment artist asked to make game assets for example, that would be the Games Industry. By looking at the 'job' and 'employment' pages of various game development sites figures and data can be gathered and collated to determine rates. Even better is to look through game industry salary survey data which cover a much broader pool of source data.
Note: this also helps realise rates subsequently quoted to the client because they are backed by industry available data and not necessarily pulled from thin air.
Working out hourly rates based on salary ^
When using information found in game salary surveys the preference is to average data, where available, rather than necessarily relying on a single source. Having said this however, there is a fair amount of commonality across surveys so where few datasets are available, differences may be minor nonetheless.
Note: in the following, figures are rounded out to whole numbers for simplicity so may not strictly calculate absolutely. They are also assumed to be 'net' and not 'gross' amounts, i.e. after deductions.
For example Develops UK salary survey for 2013 has artists income averaged at £27,813 GBP, or approximately $46,973 USD. Whereas (US) Game Career Guides Survey for 2013 has artists averaged at $48,400 USD, or approximately £28,657 GBP*. Combining the two averages to $47,686 USD or £28,234 GBP. As both are trusted sources however, either/or can be used as preferred.
Taking the (US) Game Industry Salary Survey for 2013 as an example for the remainder of this article, accordingly an artist with three or less years experience averages approx. $48,000 for 260 working days in the year, rounding out to approx. $185 a day or $23 per hour. This figure can now be used to price the project.
Note:  conversion rate of £1/$1.68, May 2014
 260 days is derived from the working week being five days multiplied by weeks in a year (assuming no holidays, the artist not being whip-lashed to work on weekends, or super-glued to their seat on Friday night for crunch).
 Further figures from the same survey show an artist with more than three but less than six years experience (mid range '3-6' experience bracket) earns around $32 per hour ($67,000 / 260 = $258 day, / 8 = $32 hr); six years or above (upper range '6+' experience bracket) and that works out as $43 per hour ($90,000 / 260 = $346, / 8 = $43). Figures are round up/down to whole numbers for expedience rather than accuracy.
The figures for 2007, when this article was originally written, were as follows based on the Game Career Guide survey for that year (figures are approximate);
• $42,672 averaged salary
• $164 per day
• $20 per hour
• $30 per hour for more than 3+ but 6- years
• $35 per hour for 6+ years
Looking at a model estimated to take a (working) week to build and ship, i.e. five days, eight hours a day, using the figures previously determined it would cost around $925 to produce ($185 * 5 = $925), a number that can be adjusted depending on project specifics and what the freelance individual is bringing to the table.
Note:  the total might be adjusted based on the difference between each salary level; a $9 increase from low to mid ($3 per experience year between the '0-3' & '3-6' experience brackets), or $11 increase mid to high ($4 per experience year between '3-6' & '6+' experience brackets). So for each year of experience lacking the freelancer might deduct $3 or $4 per hour depending upon which side the the category bracket divide they fall (above or below '0-3', '3-6' or '6+') - only having one year experience might mean deducting $6 from the hourly rate, reducing it to $17, $136 per day, $680 per working week.
Using figures for 2007, again when this article was originally published, an item that took one working week to complete would cost approx. $800 to produce (at c.$20/hr, c.$160/day).
Once done this at least puts the freelancers quote on equal(ish) footing with Real World value, making the project more likely to be signed-off by the prospective client because they can see the corrolation.
Charging per hour or per project ^
However, even though the hourly rate may now be determined, a problem presents itself in terms of input not always equating to output. In other words whilst "charging by the hour" tends to favour relatively small, short duration projects, on larger, more complex or sustained tasks, the calculation could (and often does) result in work being cost prohibitive to produce. In such instances it may be better to price per project based on previous projects or using a sliding scale of appreciation/depreciation.
Note: for further ideas on quoting based on per-project rates refer to calculations outlined in the "some examples" section Note below.
Currency conversion & International freelance work ^
One particularly troublesome issue trying to work out freelance rates is currency conversion. The conversion itself is not the problem so much as the fact that currency value vary a great deal depending on the freelancers location relative to the client. This can be problematic because of equivalent buying power (technically called "purchasing power parity") and standard of living disparities, for example, If the exact same microwave were purchased by a group of individuals around the World its price would vary depending upon their respective standard of living costs and the relative value of each currency. In other words although the oven has the same intrinsic value, the money used to buy it does not leading to, in some instances, significant disparity.
Note: an individual in the UK purchasing an oven from the USA would be able to acquire a more expensive item for the same amount of GB Pounds because the currency rate (currently) provides more US Dollars in exchange for GB Pound (£100 GBP = $170). Or they could spend less to get the same original item intended because they don't need to spend as many GBP (£60) in doing so. Conversely, a person in the USA using their $100 to buy from the UK would find their purchasing power reduced to a cheaper model because they get fewer GB Pounds for their US Dollars ($100 USD = £60 GBP). Else they would need to spend more to acquire the same one ($170).
The implications of this are significant because it means whilst attempting to determine hourly base rates, source data used to determine calculations may inadvertently sell either/or/both the freelancer and/or client short. In other words $48,000 USD is not mutually equivalent to £48,000 GBP, nor is $23hr USD mutually equivalent to £23hr GBP because of currency value and purchasing power inequality.
Note: incidentally $23hr USD equates to £13hr which is a little over the average wage of £12.62 for the UK (figures for 2011). The average hourly rate for the USA in 2013 was $23.86.
As a result of this variation freelancers working Internationally often face the unfortunate reality of dealing with varying amounts of income (or value) loss depending on the exchange direction to keep quotes reasonable attractive clients, an aspect of providing freelance services for which little can be done to compensate.
Note: a UK based freelancer charging a UK client £925 GBP for a finished game character would be charging a USA client $1,560 due to exchange rates. Whereas to quote a USA equivalent price of $925 USD the UK freelancer has to drop their price to approx. £548 GBP, a loss of £377 GBP.
In Jan 2010 $42,000 USD converted to c. £26,266 GBP, early 2009 approx. £22,000, Jan 2012 to c. £26,791, May 2014 to c. £25,000. Note also that being located in a Country with a weak currency does not necessarily mean being able to make more money working Internationally because currency valuations, and the expectations that carries with the client, works against the jobbing freelancer - clients expect things to be cheap.
asset sites as a comparison ^
An alternative approach to determining cost of freelance work is to look at websites offering comparable assets for sale, services like TurboSquid for example. Bear in mind that such sites are generally geared towards the repeat sales so both content and pricing structures tends to be more generic in nature to accommodate this fact - authors are not making custom content to meet specific demands and requirements, rather they are producing generalised content to appeal to a broader audience for multiple sales. This also means pricing can be low-balled with losses being compensated through repeat purchase.
In using asset sites for rate determination be mindful that clients may use their low prices as leverage against any quote offered. Should this happen clarify that custom and unique content taloured to their specific request is being purchased, for which only they will have use, thus reducing the likelihood of the same asset appearing in another game.
Note: this latter point, content appearing elsewhere, also negates accusation of 'theft' and/or incorrect or improper content licencing that could result in a 'Cease and Desist Notice' (which tend to be of immediate affect). Although generally the clients responcibility, the damage that can be caused by this may find it's way back to the freelancer for remedy. In such instances the original agreement between affect parties may need to contain "due-diligence", "to the best of my knowledge" or "indemnity" clauses, negating the impact of events occuring after-the-fact over which the freelancer has no control.
Taxes & personal liabilities ^
Important Note: the following section is provided 'as is' and should not be regarded as being 'legal' or 'tax' advice. The Reader is urged to seek professional (certified) legal and/or tax help where necessary.
Tax, and associated personal liabilities, is the most important aspect of providing freelance services because it carries with it a heavy burden of accountability that others are typically not cognisant to. And this speaks to the biggest problem discussing this particular topic online as it's often had by those naive to, or wholly ignorant of, the realities attributed to the provision of a business service - freelancing is a business, not a type or style of working.
Note: the big problem discussing taxes and other liabilities with respect to freelancing is that it's often carried out by individuals who, intentionally or not, misappropriate the term "freelance", or misunderstand what it implies; it is not merely a word used to describe style or way of working. Rather it specifically describes, as mentioned above, a business related activity. What this means is that getting paid to make something "on the side" or "for a bit of extra cash" does not make that person 'freelance', unless, they are duly registered with the appropriate Government Agency that recognises their status as being registered for the purposes of providing goods or services either as an self-employed individual (Sole-Trader) or an aspect of a business Entity they may own or be part of (but not as an employee) - for example HMRC in the UK or the IRS in the USA. When providing freelance services these distinction matters because liabilities differ depending upon the parties involved respective status's and under what capacity agreements have been made - private individuals do not carry anywhere near the same weight of liabilities, obligations and protections under law generally ascribed to registered Entities & Individuals (Sole-Traders/Self-Employed). In other words it's meaningful if a person calling themselves a "freelance artist" is actually registered as being in-business for the purpose of providing that service.
With that said there are two main reasons, each of which will be discussed below, why freelancers often get this wrong; 1) trying to pass the Tax burden off onto the client, and 2) not realising that in doing so it actually increases the tax burden due.
Income Tax is a Duty on Labour ^
So, what is Income Tax?. In essence Income Tax is a Duty levied on labour; "labour" being any action or activity a person engages when providing (business) services in return for remuneration. This means any payment received in lieu of work is liable for Tax. As such it is only supposed to be levied upon the person providing the service, not those in receipt of them; Income Tax, emphatically, has absolutely nothing to do with the client so the burden cannot be offset or passed on to them in any shape or form (#1 in the previous section).
Note: it can be argued, and often is by Revenue Services, that trying to recoup tax losses by passing the buck in this way amounts to fraud because the client is being charged for something they never receive as part of the product or service purchased.
For the jobbing freelance artist then it's essential to keep all liabilities specifically relative to actual work done and income received.
Taxes & passing the buck ^
Using the $925 USD project mentioned earlier, and for the sake of the discussion, setting the Income Tax Rate at 20%, the tax liability works out to be $185, leaving $740 'profit'. At (Tax) year end $185 would go to the Government as the tax liability for this particular job, the freelancer keeping $740. These are the basic 'in' and 'out' costs of the job - $925 in, $185 out ($740 kept).
Note: for brevity costs are relayed in terms of 'income' and 'tax' liabilities only; other aspects of price determination, 'expenses', 'running costs' etc., are ignored.
 20% of $925 = $185
 $925 - $185 = $740 - profit refers to income remaining after Tax deduction
If the freelancer were of the mind to 'recover' this $185 burden from the client, they would normally think to do so by simply adding it to the original quote itself. In other words they reason it as follows;
"I'm going to charge $925 for this project, the tax due on that is $185, so I'll 'recover' that by adding it to the original quote to get a new total of $1110 to bill the client. That'll keep me covered for my $185 tax and mean I get the whole $925 I was originally after."
Note:  ($925 + $185 = $1110)
In doing this however, it changes the Tax liability from $925 as previous to the new total of $1110. At 20% again, tax now due is $222, instead of $185, leaving $888. A loss of $37.
Note:  20% of $1110 = $222, and $1110 - $222 = $888.
In seeing additional loss further calculations are done until a figure is reached where as much of the original value as possible is recouped - in this instance adding a further $47 to the previous $1110 resulting in an amount billed to the client of $1157. Again however, this increases the Tax burden further; on $1157 now $231, a further $9, but this does leave the full $925 the freelancer was originally trying to recoup.
Note:  20% of $1157 = $231, and $231 - $1157 = $925.
The problems caused by these types of calculatory gymnastics should be self-evident, over time the additional tax burden soon mounts up, often meaning an increase in offset to accommodate the increase in tax due (notwithstanding tax/income tier levels).
Note: the one caveat to the above is the possible inclusion of VAT or Sales Tax - the difference being they are transparent service or sales charges everyone knows about, and can be paid and recouped legitimately as needed.
Of course in the final equation it should not go without saying that from the clients point of view, a project quote at $925 is very different to $1157, the latter a price that's gone well over the psychological $999 barrier (from three figures to four), dramatically increasing the client declining the job entirely.
The realities of working freelance mean it can at times be overly converluted. It need not be. So long as a reasonable amount of transparency exists between parties, problems that do crop up can be fixed relatively quickly and painlessly. The freelancer has to be flexible in their negotiations, and honest with skills and experience, and being slightly conservative with their service offerings to ensure project completion. Additionally, make sure all the appropirate paperwork and forms are filed, and that the individual or business capacity under which freelance services are being offered duly recognised and noted officially. And finally, although most aspects of being self-employed or running a business are relatively straightforward, when issues do arise it is always best to consult a fully qualified professional.
Some examples ^
The following are just some examples to get the ball rolling, naturally the actual rate charged is going to depend on what needs to be done and the freelance artists skill level, competence, quality, speed; are the models/assets to include normal maps, if so does that mean having to model any additional high polygon meshes from which to 'bake' textures and so on. IS content to be made for mobile media, iPhone's or tablet devices; low polygon, small texture size, diffuse only asset sets?
Note: figures are calculated as follows; the average 'artists' salary is taken as being $48,000 per year, in which time they may work on a single game producing varying amounts of content - a character artist might create twenty-four characters; a level designer six levels; an environment artist 250 props, and so on. The break down is then averaged dividing $48,000 by 24 = $2000 per character; by 6 = $8000 per level; by 250 = $192 per prop.
However, an important caveat and consideration is that the above does not take into account the fact that specific asset types typically have several people working on them at the same time; the production of a character for instance, might involve the addition of a texture artist, a rigger, an animator, and audio personnel. That's a combined salary for all of $240,000, or a cost of $10,000 per character, $40,000 per level, $960 per prop.
Figures shown below then are very rough estimates based on the above and can, and should, be adjusted as appropriate and commensurate the individual freelance artists skill, experience etc., the number of tasks deployed (mesh, texture, audio?), and/or if other equally skilled individuals are to work on a particular project.
A barrel, box or crate, $50+
An empty simple warehouse structure, $500+
Series of map objects, pillars, arches, doorways, $750+
Small empty 'industrial' level, no map objects, $2,500+
Larger empty 'industrial' level, no map objects, $5,000+
A 'city' scape level, no map objects, $5,000+
Large level including terrain and buildings, no map objects, $10,000+
Character less than 1000 triangles, rigged, no animation, $800+
Character less than 2500 triangles, rigged, no animation, $1,500+
Character less than 5000 triangles, rigged no animation, $2,500+
Character less than 5000 triangles, rigged with animations, $5,000+
Content for small virtual world, $2,500+
Content for a large virtual world, $5,000+
Originally written in 2009.