What to Charge
You have the option of charging your clients by the hour or by the song. I prefer charging by the hour, because that discourages the writer from suggesting endless changes. If, however, you don't work quickly and you like to take the time to experiment, a per-song rate may work better for you.
At the beginning, you should charge fairly low fees for your services. Many publishing companies allow their writers only $500 per song, including vocal fees. That translates into approximately $35 per hour, assuming ten hours of work on your part (covering the whole process, from tracking through mixing) and a $150 fee for the vocalist. When you get more work than you can handle, raise your rates. In the New York area, $100 per hour is the upper limit for song demos.
Some producers ask for a percentage of the publishing (in addition to a fee) for the songs they demo. I don't recommend doing that because professional songwriters — the clientele you want to cultivate — typically won't agree to those kinds of terms.
