Editors can work for an hourly rate or a negotiated fee.
The key editorial services are described below. Not all editors offer all services.
Copyediting: Editing for grammar, spelling, punctuation and other mechanics of style; checking for internal consistency of presentation and facts; marking heading levels and approximate placement of art; highlighting copyright and legal issues; and notifying design and production staff of any unusual requirements. May also involve incorporating the client/author’s replies to queries (the brief should specify whether this work is to be included in the copy editing fee or performed for an additional fee).
Manuscript assessment: Reading the manuscript or a representative section, advising on stylistic matters and (if requested) commercial potential, and offering general advice on development.
Manuscript development: Working with an author to develop a manuscript.
Proofreading: Reading typeset copy word-for-word against a manuscript or style sheet, identifying deviations for correction, and querying editorial errors. May also include checking conformity to type specifications, creating a style sheet, and checking typography (kerning, margins, word spacing, repetitive word breaks, and so on.).
Plain English rewriting: Rewriting complex, bureaucratic or technical material so the meaning is clear to a lay person.
Production management: Supervising all stages of publishing production from editing to design to printing.
Substantive (structural and stylistic) editing: Ensuring that the structure, content, language and style of the document are effective and appropriate to its intended function and readership. The brief should specify whether changes are to be suggested to or drafted for the author.
More details can be found on http://iped-editors.org/About_editing.aspx#levels