Most photographers set prices by looking at what other photographers charge. That tells you what the market will accept, but it can't tell you whether a price works for your business. Two photographers can charge the same $1,500 and have very different results, because their gear, software, insurance, editing time, and number of sessions are different.
Pricing from your cost of doing business starts with your own numbers instead. You add up what the business costs to run, decide what you want to pay yourself, and divide by how many sessions you can realistically shoot. The result is the least you can charge per session and still hit your goal.
This article walks through the formula, works one example from start to finish, and shows how to check the packages you already sell.
The cost-of-doing-business formula
You need six inputs:
- Yearly overhead: the business costs you pay no matter how many sessions you shoot, such as gear replacement, software, insurance, marketing, education, phone and internet, and accounting
- Desired salary: what you want to take home for the year
- Tax set-aside %: the share of profit you'll put aside for taxes
- Sessions per year: how many sessions you want to shoot (and can actually fit in)
- Direct cost per session: costs that come with each session, such as a second shooter, prints, albums, travel, or gallery fees
- Hours per session: shooting, travel and setup, culling and editing, plus emails, consults, contracts, and delivery
Then:
- Pre-tax profit needed = desired salary ÷ (1 − tax set-aside %)
- Revenue needed per year = yearly overhead + pre-tax profit needed + (direct cost per session × sessions per year)
- Required price per session = revenue needed ÷ sessions per year
- Break-even price per session = (yearly overhead ÷ sessions per year) + direct cost per session
- Effective hourly rate = desired salary ÷ (hours per session × sessions per year)
The required price is the number to aim for. The break-even price is the floor: below it, every session loses money before you've paid yourself anything.
Worked example (illustrative numbers)
The numbers below are made up for this example. They are not industry averages or survey data, so replace each one with your own.
Yearly overhead: $11,000
| Overhead item | Example yearly cost |
|---|---|
| Camera gear and lenses (replacement budget) | $3,500 |
| Software (editing, gallery, CRM, website) | $1,800 |
| Marketing and advertising | $1,500 |
| Insurance (liability and equipment) | $900 |
| Vehicle and mileage (non-session driving) | $900 |
| Education and workshops | $800 |
| Phone and internet (business share) | $600 |
| Accounting, legal, and business fees | $600 |
| Other overhead | $400 |
| Total | $11,000 |
The other inputs:
- Desired salary: $60,000
- Tax set-aside: 25%
- Sessions per year: 40
- Direct cost per session: $200
- Hours per session: 15 (4 shooting, including travel and setup, 8 editing, 3 admin)
Step 1: Pre-tax profit. $60,000 ÷ (1 − 0.25) = $80,000. If you want $60,000 after setting aside 25%, the business has to earn $80,000 in profit first.
Step 2: Revenue needed. $11,000 overhead + $80,000 profit + ($200 × 40 sessions = $8,000) = $99,000 a year.
Step 3: Required price. $99,000 ÷ 40 = $2,475 per session.
Step 4: Break-even price. ($11,000 ÷ 40 = $275) + $200 = $475 per session. At $475 you cover your costs and pay yourself nothing.
Step 5: Effective hourly rate. 15 hours × 40 sessions = 600 working hours. $60,000 ÷ 600 = $100 an hour of take-home pay.
The gap between $475 and $2,475 is the point of the exercise. A session priced at $800 can feel profitable because it's well above your costs, yet in this example it would cover less than a third of the salary goal.
A note on the tax set-aside
The 25% in the example is a savings percentage, not a tax rate. Pick yours with a tax professional. One reason to take it seriously: self-employed people in the US pay self-employment tax, and the IRS lists the self-employment tax rate as 15.3% (12.4% for Social Security and 2.9% for Medicare). That's separate from income tax. If you leave taxes out of the formula, your "salary" is really a pre-tax number.
How the number of sessions changes your price
Overhead and salary get spread across every session you shoot, so the session count has a large effect. This table keeps everything from the example the same ($11,000 overhead, $80,000 pre-tax profit, $200 direct cost per session, 15 hours per session) and changes only the number of sessions. Prices are rounded to the nearest dollar.
| Sessions per year | Required price per session | Working hours per year at 15 hrs each |
|---|---|---|
| 20 | $4,750 | 300 |
| 40 | $2,475 | 600 |
| 60 | $1,717 | 900 |
| 100 | $1,110 | 1,500 |
| 150 | $807 | 2,250 |
Two things stand out. More sessions lower the price you need, but only if you can actually fill them and do the work. At 15 hours per session, 150 sessions would take 2,250 hours a year. That's why high-volume work, like mini sessions, only works when each session takes far fewer hours. The second point is that the hours column is your reality check. If the number of sessions your price depends on doesn't fit in your year, the price is too low.
Check the packages you already sell
You don't have to start from a blank page. Run each existing package through the same math:
- Overhead share per session = yearly overhead ÷ sessions per year ($275 in the example)
- Profit per package = package price − the package's direct costs − overhead share
- Hourly profit target (pre-tax) = pre-tax profit needed ÷ working hours per year ($80,000 ÷ 600 = about $133 in the example)
- Price needed for this package = direct costs + overhead share + (hourly profit target × the package's total hours)
For example, take a package priced at $2,400 that takes 15 hours in total and has $50 of direct costs. Profit is $2,400 − $50 − $275 = $2,075. The price needed is $50 + $275 + (about $133.33 × 15 = $2,000) = $2,325. The package is $75 above target, so it pays for itself and its share of your salary.
If a package comes out below target, you have three levers: raise the price, cut the hours (faster culling, templates for emails and contracts), or reduce direct costs. Packages that include albums or a second shooter are where direct costs creep up, so check those first.
A second opinion from industry benchmarks
Professional Photographers of America (PPA) looks at the same problem from a different angle. Its business resources page describes recommended benchmarks expressed as a percentage of total sales, for cost of sales, general expenses, and owner's compensation plus net profit. For example, PPA's cost of sales benchmark is 25%, meaning no more than a quarter of total sales should go to producing what you sell. PPA counts your production time as part of cost of sales, so its categories don't line up one-to-one with the formula above. Treat it as a cross-check, not a replacement. PPA also offers a planning calculator called Square One that works from your net income goal to sessions and sales averages.
How to use your price once you have it
- Recalculate once a year. New gear, a new software subscription, or a higher salary goal changes the answer.
- Use your real numbers as they come in. After a season, replace the estimated overhead with what you actually spent and the estimated hours with what sessions actually took.
- Compare required price with your average package price. If your average sale is below the required price, you'll need more sessions than planned, a higher price, or lower costs to hit your goal.
Frequently asked questions
Should I just charge what other photographers in my area charge? Local prices tell you what clients are used to paying, and that matters. But they don't know your costs. Run the formula first, then compare. If your required price is far above local prices, look at your overhead, your hours per session, or the type of client you're marketing to.
What if my required price feels too high to say out loud? Look at which input is driving it. Often it's a small number of sessions carrying a large overhead, or a lot of editing hours per session. Changing one of those may be easier than discounting.
Is this tax or accounting advice? No. It's a planning formula. Check tax questions with a tax professional.
Do the math in a spreadsheet
If you'd rather not do this by hand, the Photographer Business System includes a Pricing & Package Calculator that uses this cost-of-doing-business approach. Enter your yearly overhead, salary, sessions, and hours, and it shows your required price per session, break-even price, and effective hourly rate, then compares profit on 3 packages side by side. The same workbook tracks inquiries, bookings and balances, gallery delivery deadlines, and income and expenses. It's a one-time $34 for Microsoft Excel, with no subscription.