How to Calculate Your Freelance Rates

How to Calculate Your Freelance Rates

No matter where you are in your freelancing journey, determining how much to charge for your services can be the bane of your existence. You may find yourself overworked and underpaid if you don’t quote a high enough amount; quote too much and you may scare potential clients away. Then of course, there are those “passion projects” that may not pay what you’re ‘worth’ but that offer invaluable experience and establish connections. The truth is: your rate can fluctuate widely based on a number of factors such as experience, availability and of course, your industry.

If you’re just starting out as a freelancer, or more specifically, are a newbie to the professional world, you should be acutely aware of your capabilities. A fresh college graduate won’t demand as much per hour as someone who has been in the game for 10+ years (unless of course, they’ve already got some serious hands-on experience and a portfolio to match). That said, be realistic about what you can deliver and your actual goals. Low paying jobs might not be the key to making ends meet, but it should be stressed that value can come from networking opportunities as well as developing skills that can lead to higher paying gigs. Sites like Upwork are a great place to pick up one-off clients, to build up your portfolio or fill in the gaps when business is slow. The pay is usually below industry standards but sometimes it's better than nothing. It can be a bit of a slow crawl, but making sure you have the know-how to deliver the goods will inevitably give you the leverage to increase your rate on the next project and then the next, and so on.

Always do your research! Find out how much freelancers are charging for similar work, or better yet, use a site like Glassdoor to determine what a full-time salary for someone with your experience and job duties looks like. To determine how much the average hourly pay is for similar positions, divide the salary you find by the number of weeks in the year (that would be 52, FYI), then divide that number by the number of hours you work in a week (40 is pretty standard). This is the easiest way to establish your baseline. If you’re just starting out, you may need to lower your rate a bit in order to be competitive until you prove yourself.

At this point, you’ll probably be feeling a bit overwhelmed, but hang in there...because there’s more math to come! Sadly, we don’t live in a world without expenses, so whatever money you have coming in from your gig(s) will likely be going towards something - namely bills: your accommodations, coworking space, rent, travel costs, taxes, insurance, and food. You’ll need to take that all into consideration when setting your rate. Ideally you want to ensure you’re charging enough to at least cover your basic life expenses or that you have enough clients in your pipeline that you’re able to get by. There will be months where you will make more and plenty of times when you may make less. We’ve mentioned in the past that freelancing involves A LOT of managing of expectations.

Even though our aim is to point you in the right direction, you’ll need to put in the work to figure out what to charge based on your unique situation. Set your baseline and work from there; manage your time so you’re working smarter, not harder and don’t be afraid to ask for what you’re worth!


 

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