A significant non-zero number of scientists do additional paid work on top of their day job in the form of consulting, or being paid for their expertise by someone other than their main employer (a university or research organization, for example). This inevitably leads to the question of how much a given service/task will cost, and as a the usual outcome is an under-estimate on the part of the would-be consultant.
As someone who’s done a bit of this in the past, and in both the scientific & artistic/theatrical side (two areas where professionals, especially early in their careers, low-ball their own value), here are a few tips to get yourself started.
There’s all sorts of geographic variation in how much a given service costs, and that’s a horrendously complex factor that will obviously depend where you are. As a starting point, though, salaries are an imperfect but widely interpretable proxy. I suggest making a spreadsheet. We’ll make two column: one for your day job and one for consulting.
In the first row, enter your gross annual salary (i.e., the pre-tax, pre-deduction “advertised price”).
In the second row, enter your net annual salary (i.e., after tax & other deductions).
From these, you can easily calculate monthly net & gross (divide by 12), weekly (divide by 52), and an hourly rate (divide weekly by something between 36-40 depending on the norms of your area).
In the next column, we’ll calculate the starting point for consultancy pricing. First, multiply all these rates by at least 1.5. Why? Because you cost more than your salary. Organizations recover some/all of this in overhead/incidental costs or some other accounting term. Electricity, furniture, phone, computer, heat, and the general support like admin & finance, HR, IT and everything else. And in some places, this also includes the employer’s pension and social safety net (e.g., National Insurance, Employment Insurance) contribution which you as an individual also need to manage.
Taking the consultancy hourly gross rate, figure out what 2 days would cost. This is the absolute minimum to charge. Admin burden & infrastructure don’t scale well with length of consultancy. It takes just as much time to deal with the paperwork for a 1-day contract as a 1-month contract. One option is to use this (or some variation) as a base price on top of which any hourly work is billed. Admin carries on after the contract is over, remember, when filing taxes, or maintaining records.
And of course, this assumes your work is based at your home and on a computer. Travel and field work costs would be extra, of course.
When estimating the time tasks will take, I generally adopt the Montgomery Scott Method for Time Estimating (MSMTE): multiply your original estimate by a factor of at least four (two may be more realistic), particularly for more complex projects. And don’t forget to track your time using a timesheet or other method so you know how much time the task is taking. If you think it’s going to go over, flag this with your client. Chances are it will rarely (if ever) be under.
So let’s walk through an example.
You’re asked to do some desk-based analysis or writing, and you reckon it would take you a week to do (that is, about 40 hours of work). Your current annual gross is $50k (which is about $25/hour), so your consulting rate is $38/hour. The base cost is $1520. Add 2 days’ for admin ($570) and the total contract would be $2090.
This is, of course, just a starting point. It’s at your discretion to change any of the parameters here, of course, and they may also vary depending on the situation (NGO vs government agency vs corporate body for example). But my suggestion here is to simply alter the multiplication factor (for example, 1.3x for NGOs & non-profits, 1.5x for universities/government, 2x for for-profit companies). And this also assumes that you feel your salary accurately reflects the job/skills that you do (which may not always be the case, though I suspect few of us would describe ourselves as overpaid).
One final note – be prepared for there to be negotiations, and don’t undervalue yourself. It’s ok to turn down some work if you don’t think it’s worth your time, but equally there may be personal/professional situations where you might take on a piece of work at a lower rate than you would do otherwise (e.g., when first starting up). And recall that these numbers/figures I’ve thrown around are just a starting point, and will depend on where you are, the kind of work you do, the field, and the competition. But they’re a good place to start.
See also this post by Emilio Bruna on the same topic.