What is Minimal Price Padding?

Owned by Damian Rozmiarkowski
Last updated: Dec 18, 2024
5 min read

Introduction

Every generated Purchase Order (PO) from a particular XTM Cloud project (Project Editor → Estimates → Costs) includes a field labeled Minimal price padding.

This article describes what this factor calculates and how the calculation works.

How does Minimal Price Padding work?

General information

The minimal price padding factor is related to three specific options in user rate cards:

  • Minimum charge per language:

  • Minimum charge (per a single step):

  • Minimum charge per project:

IMPORTANT!

Keep in mind that the Minimum charge per language and Minimum charge (per single step) fields are mutually exclusive, which means that you cannot apply them both at the same time, in the same rate card. Once you enter a value in either of these fields, the other one will become unavailable (grayed out).

Minimum charge per language

Example to explain the minimum charge per language:

You are using the Minimum charge per language factor in the rate cards for a single Linguist. The Linguist is assigned to an entire XTM Cloud project. The project contains one workflow step (Translate), for two target languages, and the rate cards for those target languages contain different values for the Minimum charge per language factor. For example:

  • English (UK) → Polish: 20 GBP.

  • English (UK) → German (Germany): 15 GBP.

In this case, the minimal price padding value will be calculated separately for each target language, according to the metrics/statistics taken from that language and the values set in the corresponding rate card. The formula used is as follows:

Minimal price padding = Minimum charge per language - target language's metrics/statistics

Let’s say that the value taken from the metrics/statistics for each target language is 5 GBP.

Taking everything else into account, we can perform the following calculations:

  • Minimal price padding for Polish: 20 GBP - 5 GBP = 15 GBP

  • Minimal price padding for German (Germany): 15 GBP - 5 GBP = 10 GBP

When we add up the values, the total minimal price padding for this project is 25 GBP. This will be shown on the PO for the assigned Linguist.

IMPORTANT!

If the minimal price padding value is negative, it is not added to the PO at all!

Minimum charge (per single step)

The Minimum charge per step does not work the same way as the Minimum charge per language.

Example to explain the minimum charge per step:

You are using the Minimum charge per Translate step factor in the rate cards for a single Linguist.
The Linguist is assigned to an entire XTM Cloud project. The project contains one workflow step (Translate), for two target languages, and the rate cards for those target languages contain different values for the Minimum charge per Translate step factor. For example:

  • English (UK) → Polish: 20 GBP.

  • English (UK) → German (Germany): 15 GBP.

In this case, the minimal price padding value will be calculated per step, according to the rate card. If rate cards for different languages contain different values for the Minimum charge per Translate step factor (as in the example above), only the higher value is taken into account. In this case, the formula is as follows:

Minimal price padding = Highest minimum charge (per single step) - total metrics/statistics

Let’s say that the value from metrics/statistics for each target language is, again, 5 GBP.

Taking everything into account, we can perform the following calculation:

20 GBP - 10 GBP = 10 GBP

The total minimal price padding for this project is 10 GBP. This will be shown on the PO for the assigned Linguist.

IMPORTANT!

If the minimal price padding value is negative, it is not added to the PO at all!

Minimum charge per project

The Minimum charge per project is also taken into account for Minimal price padding.

It works similarly to the Minimum charge (per single step), but it is triggered at the other stage of the cost-calculation process.

What if the Linguist is using the Minimum charge per language in a rate card for one target language and the Minimum charge (per single step) in a rate card for another target language, in a single XTM Cloud project?

Example to explain this scenario:

The Minimum charge per language factor is used in a rate card for one target language and the Minimum charge per step is used in a rate card for another target language, for the same Linguist. The Linguist is assigned to the entire XTM Cloud project. The project contains one workflow step (Translate) and two target languages, and the rate cards for those target languages contain different values for the Minimum charge per language and Minimum charge per step factors. For example:

  • English (UK) → Polish: 20 GBP (Minimum charge per step).

  • English (UK) → German (Germany): 15 GBP (Minimum charge per language).

Let’s say that the value from the metrics/statistics for each target language is, again, 5 GBP.

In this case, the minimal price padding will be based solely on the Minimum charge per step, as it takes precedence over the Minimum charge per language, and so will be applied to the entire project (all of the project target languages).

That being said, XTM Cloud will apply the Minimum charge per step formula. Therefore, taking all the details above into account, the minimal price padding for this project will be 10 GBP.