How to Set Your Freelance Rate (Without Guessing or Underselling Yourself)
Category: Freelance Tips | WorkRemote HQ
Most freelancers pick their rate by looking at what someone else charges and going a little lower. That’s it. That’s the whole strategy. And it’s why so many talented people spend years grinding away at rates that don’t actually cover their life, let alone build anything resembling financial stability.
I did this too. Early on, I charged $35/hour for copywriting because another freelancer on a forum mentioned that’s what she started at. She was in a different city, with different expenses, different clients, and a different niche. None of it applied to me. But I didn’t know any better, so I copied her number and called it a rate.
The real problem isn’t just that freelancers charge too little. It’s that most of us never do the math. We make gut calls based on fear: fear of losing the client, fear of sounding greedy, fear of not being “good enough yet” to justify charging more. That fear is expensive. Here’s how to price yourself based on something real instead.
Stop Guessing — Know Your Minimum Number First
Before you think about what the market pays or what feels fair, you need to know your floor. This is the number below which you literally cannot afford to take a project.
Add up everything you spend in a month. Rent, food, utilities, subscriptions, insurance, software, phone, all of it. Don’t lowball this. Include the irregular stuff too: car repairs, medical bills, annual costs that only hit once a year but still need to come from somewhere. If you track things annually, divide by 12.
Now decide how many billable hours per month you actually want to work. Not how many hours you’ll sit at your desk. Billable hours only. For most full-time freelancers, that’s somewhere between 80 and 120 hours a month. Admin work, pitching, emails, accounting, none of that gets billed. Account for it honestly.
Divide your monthly expenses by your billable hours. That number is your absolute minimum before taxes.
Then add taxes. In the US, self-employment tax alone is 15.3% on top of income tax. A safe buffer is to add 25–30% to whatever you got. After that, add a profit margin: money that goes into savings, retirement, a buffer fund, or back into the business. Even 10–15% changes things significantly over time.
What you land on after all of that is your floor. You should not take work below it. Not for “exposure.” Not to “build the relationship.” If the client can’t meet your floor, the project costs you money.
Research What the Market Actually Pays
Once you know your floor, you need to know what’s possible. Your floor tells you the minimum. Market research tells you the range you should actually be quoting.
Start with Glassdoor and LinkedIn Salary Insights. Yes, these are designed for salaried employees, but they tell you what companies are budgeting for the work you do. If a content strategist in your city earns $80,000–$110,000 as an employee, that’s worth paying attention to. Divide by 2,000 working hours a year and you get $40–$55/hour as a starting point for someone with benefits, paid time off, and no overhead. Freelancers should charge more than that, not less, because you’re covering all of that yourself.
Upwork is imperfect but useful. Filter by your skill set and look at what mid-to-senior freelancers are actually charging on completed contracts. Ignore the bottom of the range. Clients who pay $5/hour are not your clients.
Industry forums and communities are underrated for this. Places like Reddit’s r/freelance, Superpath for content writers, or Slack communities for designers and developers — people share rates there if you ask. Most experienced freelancers will tell you what they charge if you approach it as curiosity rather than competition.
And if you have peers doing similar work, just ask them directly. The first time I asked a friend what she charged, I found out she was billing nearly double what I was. Same skill level, same type of client. The difference was she’d done the math and I hadn’t.
Rate research isn’t about copying someone else’s number. It’s about calibrating your expectations. If your floor is $60/hour but the going rate for your skill set is $95–$130, that gap is money you’ve been leaving behind.
Hourly vs. Project Rate: Which One to Use
Both models work. The right one depends on where you are in your career and what kind of work you’re doing.
Hourly rates are better when you’re starting out. They protect you from scope creep. If a client keeps adding tasks, piling on revision rounds, or changing direction midway through a project, you’re still getting paid for your time. Hourly billing also forces clarity on both sides about what the work actually involves.
Project rates make more sense once you know your craft well. When you’ve done the same type of project twenty or thirty times, you get faster. A task that used to take four hours now takes one. If you’re billing hourly, you get penalized for getting better. If you’re billing by project, your efficiency turns into margin.
Project rates also make income easier to predict. “$3,000 for a website” is easier to plan around than “I think this will take about 30 hours but I’m not totally sure.” Clients often prefer it too because they know exactly what they’re committing to upfront.
The trap with project rates is underestimating scope. Take your best estimate for how long something will take and add 25–30%. Then price based on that padded number. You will almost never regret the buffer.
If you switch to project pricing, base every quote on your hourly floor. Work backwards: if the project should take 15 hours and you need $80/hour minimum, the floor for that project is $1,200. Add your margin from there.
How to Handle the “What’s Your Rate?” Question
This is where most freelancers fall apart. Someone asks what you charge, and suddenly the number feels embarrassing. You hedge. You apologize. You say “around” or “it depends” or “I’m pretty flexible” before you’ve even told them the actual number.
Stop doing that.
State your rate like it’s not up for debate. “I charge $95/hour for this type of work” or “Projects like this typically run $2,500–$3,500 depending on scope.” Say the number and stop talking. The silence after you quote your rate is not a signal to discount it. Let the client respond first.
If they push back, your first move is not to drop the number. Ask questions. What’s the budget they’re working with? What does the project actually involve? A lot of what sounds like price resistance is really just a client trying to understand what they’re paying for. Talk through the value before you touch the price.
If the budget still doesn’t work after that conversation, you have choices. You can reduce the scope to fit what they can spend. You can walk away. What you shouldn’t do is cut your rate just to close the deal. Clients who pressure you down on price before the project even starts tend to be the most difficult ones once it does.
Raising Your Rate Without Losing Clients
At some point your old rate stops fitting. You’ve gotten better, your expenses have gone up, or you’ve finally run the numbers and realized you’ve been undercharging for years. Raising rates feels scary. In practice, it’s usually less painful than you expect.
For new clients, there’s nothing to announce. Your new rate is just your rate. Quote it and move on.
For existing clients, give them notice. Thirty days is standard. Keep the message short: “I wanted to let you know my rate is increasing to $X starting [date]. I’ve really enjoyed working together and wanted to make sure you had time to plan for it.” That’s it. No long explanation, no list of reasons you deserve it, no apology.
Most clients who value your work will stay. Some won’t. Losing a client who can’t meet your new rate is not a failure. It’s the whole point of raising rates in the first place. You’re not trying to serve everyone. You’re trying to work with people who actually value what you do.
One move that helps: raise rates with new clients first. Get comfortable quoting the higher number a few times before you bring it to your longest-running relationship. By the time you have that conversation, the number will feel normal to you. That comes through.
Final Thoughts
Your rate is not a fixed thing. It should change as you change. Expenses grow, skills improve, and what you offer at year three of freelancing is different from what you offered at month two. Get into the habit of reviewing your rate at least once a year.
The math is not the hard part. Adding up your expenses and dividing by hours takes twenty minutes. What’s hard is believing your number is legitimate, saying it without flinching, and holding it when someone tries to talk you down.
You built something that takes real time to develop and that clients need. Price it accordingly.
If you’re getting the business side of freelancing organized, tools like FreshBooks or HoneyBook are worth looking at early. They handle time tracking, invoicing, and contracts in one place, which matters more than it sounds once you’re juggling multiple clients. Getting that infrastructure in place before you need it is a lot easier than retrofitting it later.
Published on WorkRemote HQ — workremotehq.com