How Do Freelancers Decide How Much to Charge?
You have the skills, you have the knowledge, and you’re confident you can do the job – so how much do you charge?
It can be a tricky situation: you don’t want to under-sell yourself (if you charge too late is the job worth your time, or will the client think you’re providing sub-par work?) but you’re also worried about the prospective client rejecting you for setting your fees too high. It’s particularly difficult when you’re working in isolation and don’t know what other similar freelancers are charging.
1. Work backwards from your projected income
First things first is to project how much you expect to earn not just from this project for the year or month. A simple starting point might be to look at the salary you were making in a full-time role. You might be happy to earn the same money now as you did then, or you may want to exceed it. Say you were working full-time (roughly 180 hours per month once you’ve factored in days off) for £2,000 a month before tax: maybe you’re expecting to earn £3,000 a month as a freelancer for the same number of hours, which seems reasonable. Divide that 3,000 by 180 and you have £16.66 per hour.
Of course, this assumes that every working hour you’ve set aside will be spent on clients’ projects, which unfortunately isn’t true: a lot of working time will be spent on finding new clients, research, emails, and any other number of small tasks that you aren’t directly paid for. CreativeLive recommends designating 25% of your available working hours as being dedicated to other work-related activities – meaning that 3,000 is really divided by 135, making your rate £22.22 per hour.
2. How skilled you need to be
If you aren’t moving from a similar full-time job to freelancing, you might not have an initial rate to work from. For a starting point, try this guide for an initial hourly rate:
Baseline: The national living wage (for those aged 25 and above) £7.83
Any work experience in the relevant field? £3.00
Higher education that relates to your work? £3.00
Post-graduate education that relates to your work? £4.00
Add your 25% to cover for your non-billable tasks: £22.29, rounded to: £22.00
Add in other factors that you feel help you stand out, such as a PhD or uncommon additional skills. Remember you can always up your rate as you become more experienced.
3. Don’t compare to other freelancers
It can be tempting to look at what other freelancers are charging and then up your rates to match them or drop them to look like a better deal to clients. But it’s highly unlikely that any two freelancers will be charging the same: look to your own situation, outgoings, and expertise to name your price.
4. Assess the client’s budget
If a large company wants to do business with you, cutting your prices could make them think you’re not worth the money. However, if you’re working with a small business or a non-profit that you’re enthusiastic about, maybe you can shave the price to do them a good deal; and if there’s a company you’d really like to work with but they don’t have the funds, it could be a golden opportunity to collaborate.8
Doing it right, not doing it cheap
Overall a reputable business would rather pay more to get the job done right than throw away a pittance on shoddy work that either needs to be redone or simply doesn’t provide results. There is a lot of flexibility in freelance fees, but remember that freelancing is always a job, not a hobby, and you deserve to be paid for your work that the company couldn’t have done itself.