A photographer has to know how much they should charge for their creative skills. Fortunately, there’s an easy way to get this number. You need to calculate three things:
How much salary do you want to make
How much it costs you to be in business
The market value of the work you are doing.
The first two items are your Cost of Doing Business, otherwise known as your CODB. Once you know your CODB, you can set your Baseline Creative Fee (BCF). The market value is this usage fee you add to your BCF. It varies wildly depending on your skill, difficulty of the job, and, of course, the usage by the client.
Here’s an important lesson: If you take jobs below your CODB, you are operating at a loss. It would help if you also did your CODB every year to ensure you’re staying on track and setting sales goals.
In a straightforward formula, this is how you calculate your CODB:
(SALARY + EXPENSES) ÷ SHOOT DAYS PER YEAR = DAILY CODB
How to Calculate your CODB
Fortunately, there’s an easy way to calculate your CODB online, and it takes less than 30 minutes to do.
I’m using some numbers for this exercise that I would consider average for an emerging photographer in a medium market (i.e., not NYC or LA) and making a living solely from their photography. This photographer wants to make $50,000 a year, has a small office, no employees, no family to support, and someone who shoots a mix of editorial, commercial, and stock.
Let’s assume they will shoot 50 billable days in a year (that’s around four shoots a month). Here’s how their CODB breaks out. Note: CODB should be calculated on business expenses, not shoot costs. So leave out any reimbursed expenses like assistants, travel, food, etc.
If we plug these numbers into our formula, it looks like this:
($50,000 + $44,930) ÷ 50 = $1,798.60
$1,800 is their CODB. So, if this photographer shoots any job that pays less than $1,800, they lose money. Pure and Simple.
So, now that we know the photographer’s CODB, here are some methods to create a fee structure.
How Much to Charge Based on CODB
It’s been my experience that every assignment is different. Therefore, your fees need to be flexible to accommodate the needs of the job and your client’s budget.
I have found three good ways to create your creative fee:
1. A Day Rate
2. A Sliding Scale Per Shot Rate
3. A Project Rate
No one way works better than another. If the number of shots delivered is known, then a per shot rate works best. If the number of photos is unknown, but you’re going to be on location for ten days, then a day rate is more suited. If the shoot is a documentary-style project where you’ll be shooting a small number of times over various weeks, then a project rate makes more sense.
Using the example photographer’s CODB of $1800, your Baseline Creative Fee (BCF) would be:
3. $1800+/- project
A day rate is pretty straightforward. You shoot three days; you charge for three days. A project rate is trickier because you have to predict how much time you will spend doing the project. Make sure you get as much info before you start shooting. *The per shot rate would get very expensive if you did 20 shots in a day. So, that’s why I do that type of pricing on a sliding scale:
Using any one of these methods is how you create your Baseline Creative Fee (BCF).
Baseline Creative Fee + Usage Fees
I like to think of the BCF as your local rate. The usage included with that rate would be like the following that I offer to my local architecture clients.
Architectural Photography Usage License – Local Client:
Media: Marketing Materials, Portfolio, Website, PR, Direct Mail, Social Media (Non-Ad), Awards Submissions, Email Marketing
Region: Local & Online
Transferable: Award Submissions. All other usages non-transferable
Duration: No Time Limit
* All other usages must be negotiated before use.
The example usage license above is everything a local client is typically going to use photography for. If they do advertising, you may want to charge a little more, like 10%.
Calculate Usage Fee Based on Baseline Creative Fee
There are four basic types of commercial clients: Local, Regional, National, and Global.
Here’s how I would handle calculating the usage fee based on a BCF of $1,800.
Local Web & Marketing Usage: $1,800
Local Ad, Web, & Marketing Usage: $1,800 x 1.5 = $2,700
Regional Web & Marketing Usage: $1,800 x 2 = $3,600
Regional Ad, Web & Marketing Usage: $1,800 x 3 = $5,400
National Web & Marketing: $1,800 x 4 = $7,200
National Ad, Web & Marketing Usage: $18,000 x 6 = $10,800
Global Web & Marketing: $1,800 x 8 = $14,400
Global Ad, Web & Marketing Usage: $1,800 x 12 = $21,600
So, this is how much a photographer should charge in a nutshell.
How Much a Photographer Should Charge Summary
Please remember, this is a guide, and it’s more to illustrate that doing your Cost of Doing Business is vitally essential to being in business. Use this example as a way to wrap your brain around what your creative fee should be and why it costs more for Pepsi to use your photos than it does for the local mom & pop shop. There’s always room to negotiate, too. Don’t live and die by these numbers.
I will say that ever since I standardized my pricing, I’ve gotten more jobs that pay better. It’s also made creating estimates a lot easier because I charge what I need to stay in business. I also feel good about passing on jobs that don’t pay my CODB because that gives me time to market to jobs that will pay 10 or 20 times my CODB.