Almost every freelancer starts by picking a number that feels vaguely reasonable and hoping the client says yes. It works, sort of, until you realise you’ve been underpricing for two years and can’t figure out why you’re always busy but never ahead.
Pricing isn’t a personality trait. It’s a calculation you can actually do.
To set freelance rates, add your target annual income to your business costs and divide by the hours you can realistically bill — usually 20 to 25 a week, or about 1,100 a year. The result is your minimum hourly rate. Treat it as a floor, not a price: quote projects on their value to the client, as long as the number clears that floor with margin.
Start from what you need to earn, not what others charge
Comparing yourself to other freelancers’ rates is a trap — you don’t know their costs, their experience, or whether they’re quietly broke. Start with your own numbers instead.
Work out your target annual income. Add your business costs: software, hardware, insurance, taxes. Now the part people forget — you cannot bill 40 hours a week. Billable hours are the hours you can actually charge a client for, and between admin, sales, marketing and actual life, most solo operators bill 20 to 25 of them. Holidays and sick days come out of the year too, which pricing in your time off works through week by week. So:
(Target income + costs) ÷ billable hours per year = your minimum hourly rate.
If you need $80,000, have $15,000 in costs, and can realistically bill 1,100 hours a year, your floor is about $86/hour. That’s the number below which you’re losing money, no matter how busy you look.
Our free freelance rate calculator runs this sum for you, and adds the step most people skip: grossing the figure up for the tax you’ll owe, so the target is what you actually keep.
Understand the difference between price and worth
Your hourly floor is a safety net, not a ceiling. What a client will pay is tied to the value of the outcome, not the hours you put in. A logo that takes you four hours because you’re experienced isn’t worth less than one that takes a beginner forty — arguably it’s worth more.
This is why hourly billing quietly punishes the people who are good at their jobs. As you get faster, you earn less for the same result. Which leads to the next idea.
Should you charge hourly or per project?
Fixed-price project quotes align your interests with the client’s. They know the total up front, you’re rewarded for efficiency, and nobody’s counting minutes. To quote a project well:
- Estimate the hours honestly, then add a buffer for revisions and the inevitable surprises.
- Multiply by your hourly floor to get your cost.
- Price against the value to the client, then sanity-check that it clears your cost with margin.
If a project would take you 30 hours and it’s worth thousands to the client’s business, your price lives closer to the value than to 30 × your rate. For ongoing work, a monthly fee can suit better than either — retainers vs. project fees compares the two models.
Raise your rates deliberately
New rates should apply to new clients first — it’s the lowest-friction way to move up. Every few months, review the pipeline. If you’re turning away work or booked solid for weeks, that’s the market telling you you’re underpriced. Nudge the number, and when it’s time to bring long-standing clients along, how to raise your rates with existing clients covers the conversation.
Know your real numbers
You can’t price well if you don’t know what you’re actually earning. Not the headline figure on your invoices — the real picture, after the unpaid gaps, the late payers, the months that ran light. Most freelancers are guessing here, and guessing is expensive. A handful of financial metrics every solo business should track — effective hourly rate among them — will tell you whether your rate is doing its job.
Frequently asked questions
How much should I charge as a beginner freelancer?
Charge at least your calculated minimum hourly rate, even when you’re starting out. Being new affects how much value you can promise a client, not what your rent, software and taxes cost. If you lack a portfolio, price close to the floor rather than below it, then raise your rate for new clients as soon as you’re regularly booked up.
Should my freelance rate include tax?
Yes — your rate has to cover the income tax and any social or self-employment contributions you’ll owe, because no employer is withholding them for you. Work out your target as take-home income, then gross it up for tax before dividing by your billable hours. Sales tax or VAT is different: it’s usually added on top of your rate, not taken out of it.
Should I publish my freelance rates on my website?
Publishing rates is optional, and it works best for standardised, packaged services. A visible starting price filters out clients who can’t afford you and saves time on calls that go nowhere. For custom projects, a “projects typically start from” figure gives the same filter while leaving room to price each job on its scope and value.
How often should I review my freelance rates?
Review your rates at least once a year, and sooner whenever you’re booked solid or turning work away. Recalculate the floor each time, because your costs, tax position and billable hours drift even when your work doesn’t. New rates can apply to new clients straight away; existing clients usually move at a planned review with notice.
Where Billable comes in
Good pricing decisions depend on good information: what you’ve invoiced, what’s actually landed, which clients and projects earn their keep, and where your income is trending. Billable keeps all of that in one calm view built for a business of one.
Because every invoice is tied to a client and a project, you can see what a given piece of work truly earned — the input you need to price the next one right. Income, outstanding balances and what’s due are all visible at a glance, so “what do I actually make?” stops being a mystery. It’s $9 a month, flat. Take a look and price from facts instead of feelings.