Question:
How do you cover payment and banking fees?
Answer
To directly answer the question, it would be wise to adjust your rate to consider any banking or payment fees. Whether you are using PayPal or some other service a payment processing fee is going to be anywhere between 3% and 8%. Banking fees tend to vary a widely primarily if you're working internationally with your client base and exchange rates come into play.
Though you could adjust your pricing to consider payment and banking fees, there's something larger here that is going on. As a creative professional not only do you need to adjust for payment and banking fees, but you also need to consider what you want to take home at the end of the year.
When you take into account taxes that will occur at the end of the year, this changes the conversation. Not only do you need to account for banking and payment fees you also need to consider for state tax, country tax, VAT as well as any sales tax that may be a part of the process. This means you have to ask yourself the question: "when I am working with a client what do I want to take home each client?"
You can see an example of this in episode 35 of the freelance jumpstart TV podcast called pricing for profit. In this episode, I dive into this specific topic but as a quick and simple here's something to consider.
This means if I wanted to take home $80,000 at the end of the year I would need to make $104,000 which is 30% more then initial take amount of $80,000.
