It can be challenging for artists to figure out how to price their work, make a business plan, save for retirement, and other financial decisions. The following is a few thoughts to help compare a salaried job versus being a freelancer, and how to price your work based on that comparison. This is the same info I share with young artists I teach and is based on my own years of experience running a studio, and the advice I received as a young artist.
Note: This is very general advice, and is set up as an example only. Everyone’s situation is different and it is best to consult an accountant, tax lawyer, and a retirement / financial advisor for information specific to your situation.
The two charts below show Salary versus Freelance income. This is just an illustration, but the goal was to set up similar incomes and after-tax income in order to illustrate the difference. As you can see, a $60,000 salaried job ends up with about $51,000 after paying taxes. To have that same amount of take-home pay as a freelancer, you would need to gross $90,000 in sales, in order to pay your business expenses, health insurance, retirement, and taxes, leaving about the $51,000 that you can pay yourself.
Note: In reality, many artists have a mix of jobs that pay hourly (or a salary), along with personal / studio / business income. It can be wise to take advantage of the different tax write offs that come with each mode of income, so definitely find a good accountant who has experience working with artists / creatives / freelancers.
Your own situation will be different, but you can start with these basics to begin figuring out your own financial plan. You may look at this chart and think, wow, it would be great if my employer paid health insurance / retirement! If they don’t cover the full amount, adjust the numbers to your situation.
Salary income
| Income | ||
|---|---|---|
| Salary | $60,000 | |
| Taxes you pay | ||
| 1/2 of Social Security / Medicare | 6.5% | $3,900 |
| Other Federal / State taxes (assuming 15% total tax) | 8.5% | $5,100 |
| Total tax | $9,000 | |
| Net take-home salary after taxes | $51,000 | |
| Other benefits paid by employer | ||
| 1/2 of Social Security / Medicare | 6.5% | $3,900 |
| Health Insurance | $300 / month | $3,600 |
| Retirement | 9% of salary | $5,400 |
| Total benefits | $12,900 | |
| Your total cost to employer | $72,900 |
Freelance / Self employed
| Income | ||
|---|---|---|
| Gross income from sales / services | $90,000 | |
| Expenses paid by you | ||
| Studio rent | $1,000 / month | $12,000 |
| Other costs of running studio (materials etc) | $750 / month | $8,000 |
| Total expenses | $20,000 | |
| Adjusted Gross Income | $70,000 | |
| Tax deductible expenses | ||
| Health Insurance | $300 / month | $3,600 |
| SEP or Roth IRA retirement | 9% | $6,300 |
| Total deductible expenses | $9,900 | |
| Net income | $60,100 | |
| Taxes Paid on Net Income | ||
| Social Security Medicare | 13% | $7,813 | Other Taxes (15% total tax) | 2% | $1,202 |
| Net take home after taxes: | $51,085 |
Thoughts on how to price your work as an artist
Using the above example, let’s say you are a ceramic artist and your studio expenses match the numbers used (about $20,000 a year) and your goal is to make a net income of around $60,000. To do this, you would need gross sales of around $90,000 to cover studio expenses, studio insurance, materials, and other expenses along with taxes, retirement, and health insurance.
To figure out how to earn the $90k in a year, you can either think about how much you can produce, or better yet, how many pieces you can fit in each glaze firing, and how many glaze firings you can do in a year.
Let’s break it down:
Assume that you can do an average of 1 bisque firing and 1 glaze firing per week. That’s 50 total glaze firings per year.
Let’s say you can fit 20 bowls per glaze firing (and the only thing you make is this bowl). That’s 1,000 bowls per year
In order to make $90,000 gross per year, you will need to sell those bowls at $90 each.
This is all a very basic example, but if you have a limiting factor in your studio, such as how many firings you can do, you can start to figure out how much value you need to pull out of each glaze firing and how that can contribute to your overall sales and income goals.
The example of a ceramic artist is just one thought. You could apply this same logic to any number of artistic practices and think about how many paintings / sculptures / photographs / videos / etc you could reasonably make in a year, and start to price things accordingly.
Using the above example, you can see how some very famous ceramic artists, such as Lucie Rie and Hans Coper, made all their work in single firings (i.e. glaze applied to greenware and glaze fired.) Yes, you would have to change your firing profile but running each and every firing as a glaze firing would speed up the studio production.
Other thoughts on pricing work
This is the advice I received as a student artist, and I think it holds up as a very basic starting point (emphasis on basic!) to figure out how to price your work. This model is for student artists who are just out of school, or those just beginning to sell.
Add up the total hours you spent working on the project, then pay yourself minimum wage per hour.
Add the cost of materials to this number. Then double the number and that is your “retail” price, and you can expect to get half of that from a gallery.
To break down these numbers:
Let’s say you spent 30 hours on a painting, and minimum wage in your state is $15 per hour.
30 x $15 is $450
Let’s assume the canvas, stretchers, and paint cost $50.
Your total cost is $500
A gallery should price that painting no lower than $1,000, with $500 going to you if the work sells
Once again, this is very basic advice. Don’t underprice yourself or your value! You may have to start with a lower “wage” than you want, but as you start selling, you can keep track of the hours spent in the studio and figure out how much your time is worth, and how to pay yourself the amount you need.
How to price your work when pieces start selling
This is where things get complicated. It is basically “what the market will bear,” but with an eye to keeping prices in line with future earnings. You definitely want to grow and earn more, but be careful to not overprice (or overproduce) your market. This post is meant more for artists at the beginning of their journey so there won’t be much detail on this aspect of a career.
If your work is selling, you will probably be working with a gallery at that point and they can provide helpful information on how to price work. Keep in mind the charts above, so that you can cover all your expenses while hopefully growing and expanding your practice. I think it’s a good idea to set goals of how much you would like to earn in the studio, and that can help you decide if things are viable, or if you need other jobs to help support your art practice.
Do Galleries Really Deserve 50%
This is a common question among student artists or those just starting, and the answer is yes they do. A gallery is handling sales, communication, along with providing a physical and digital showroom for your works and introducing you to their network of collectors. It is expensive to run a gallery. Hopefully, along with handling sales they are also finding ways to introduce your work to a wider audience of other artists, critics, curators, museum board members, and more (but, the reality is most galleries are just stuck in sales mode.)
Of course, you could always try to go the direct route and sell work yourself or via your website, but then you will be handling all that extra communication, studio visits, shipping, paperwork, etc. You may find yourself doing all the work that a gallery would be doing for you, leaving you less time to actually make the work. If you enjoy sales more than actually making the work, maybe being an artist isn’t for you and you should think about working at or starting a gallery!
Pay Yourself Retirement, Pay For Your Healthcare, Plan for Time Off
If you were taking a salaried job, figuring out how much your employer pays for healthcare, what they contribute to retirement, and how much time off you get would be a normal part of the conversation at an interview or when you are getting started.
Just because you are working for yourself as an artist or freelancer doesn’t mean you should skip all of those things.
Try to pay yourself 10% of your adjusted gross income in retirement each year. Figure out what your health care will cost you and incorporate that into your pricing strategy. And plan for time off to rest and recharge. It is not easy being an artist and you should plan for the long term with everything that you do. Having enough money to spend some time away from the studio is part of being an artist too.
Are You Still an Artist if You Aren’t Selling?!
Yes! Despite all the financial talk in this post, don’t judge yourself if you are not selling or selling very little. The reality is that most artists are their own biggest patron, either with a part or full-time job. Selling art doesn’t make the work better, and not selling also doesn’t make the work worse, or more virtuous, or more pure. There’s really no connection between the quality of work and what it is currently selling for. Try to let your studio time be free and productive and open, and then when it’s time to run some numbers or balance accounts, be a little more realistic and approach things with your analytical side.
I’ll state again that most artists I know have a mix of jobs and a studio practice. Only a few are “living the dream” of supporting themselves entirely through their studio practice.
If you once again return to the above charts, that can help you figure out how to structure your time based on the income from outside work versus studio work, the time and expenses involved, etc. Every situation is different. Try to find a situation that is sustainable for you and the work that you are making or want to make.
Conclusion
Hopefully, these few thoughts will help guide you as you figure out how to set up and maintain a studio, especially from a financial perspective.
Anything that we missed? Any advice you’d like to share? Please leave a comment below.
