Calculating an instructor fee is a common question I receive from readers.  I address this a bit in my course proposal article but I’ll go into more detail here. There are a few ways you can calculate instructor fees.

Start by add up what you want to make per hour (including prep, travel time, set-up/clean-up) and add at least 30-40% to cover taxes, health insurance and other expenses an employer would normally cover.  Add to that any other costs to you e.g. room rental fees, supplies, storage containers, photocopying etc.  Then, once you have this figure you can decide which approach to take.

For example, lets say you are teaching a water colour painting class:

Let’s say the class is 1 hour long and it takes you 30 minutes at home to prep each lesson and 15 minutes to set-up and 15 minutes to clean-up for a total of 2 hours of your time per class. You live around the corner so there is negligible travel time. They give you the room for free so no room rental costs. You run the class for 8 week sessions at a time.  You also provide table cover paper, water pots, pencils and some other supplies but ask participants to purchase paint and paper.  Your supply cost adds up to \$100 for 8 participants or \$12.50 per participant. So for this example:

Your instructor wages:  2 hours of time at \$25/hr = \$50, adding 30% to this is a total of \$65 per class.  For 8 weeks of classes, the total is \$65 x 8 = \$520 for 16 hours of work or \$32.50 per hour.  Remember that covers more than just your basic instructor wage.  Many freelancers forget to factor in taxes, medical etc.

Supply costs for the 8 week session is \$100 or \$12.50 per participant.

This means a total cost to you of \$620 for 8 participants for the 8 week course.

Options for Calculating Instructor Fees

1. Charge a Flat Fee:  you bill the Retirement Home a flat fee of \$620 for a maximum of 8 participants and \$12.50 per person over the 8 maximum. You ask that \$100 + \$12.50 for enrollments above 8 to be paid as a deposit prior to the class starting with the balance (\$520) due at the end of the last class.  This will allow you to purchase the supplies in advance of the class.  If less than 8 enroll, you still receive your \$620 and make a bit of a profit.  This option works well if you want to make sure your time is compensated and there is a risk they may see last minute enrollments.   The negative aspect of this option is that many organizations will cancel the class if they get low enrollments as they will not be able to cover their overhead  with less than 8 enrolled. If they register more than 8 students, you will only see the additional supply costs covered.  However, you could make the fee for additional students over 8 higher than just supply costs (e.g. make it \$20 for each additional student over 8). Some instructors prefer this model as they would rather not work if they are not seeing a minimum amount of money.

2.  Charge a Per Person fee:  If you take the total costs of the 8 week course and divide by 8, you get the per participant charge of \$77.50.   You could charge the Retirement Home \$78 per participant and set the minimum registrations to run the course at 5 and the max at 12.  This way, if they register any more than 8 students, you would see a profit as the only additional cost to you if they register more than 8 participants is the supply costs in our example.  But, this option also has pit falls because if they register the minimum participants of 5, you would get \$390 for the course.  Subtracting your supply cost of 5 x 12.50 = \$62.50 leaves you with \$327.50.   Subtract 30% for taxes etc. (\$98.25) leaves \$229.25 for your 16 hours of work (as that doesn’t change), you’d be receiving \$14.33 an hour (compared to \$25 per hour if 8 students enrolled).   Many organizations prefer a per person charge as it is hard to predict enrollments and they want to run the class even if registrations are low.  Some instructors like this model too as they would rather work for less money than have the class cancelled due to insufficient enrollment.

Realize too that for either option above, the organization hosting the class (in this example, the retirement home) will most likely add an overhead amount to your fee and then determine the per person cost to advertise to students.

To determine the best option for your situation, you’ll have to consider all the factors that influence cost, the time it takes you to prepare and deliver the content and any other expenses that may need to be covered by enrollment fees.