I’ve lost count of how many times people have emailed me to ask about the freelance rates they should charge their clients.
Often it feels like people are just expecting me to come up with a magic number, like “$50 per hour” or “12 cents per word.”
In reality, determining your freelance rates is way more complicated than that.
So, in this article, I’m going to take you through all the factors you need to consider when working out what you should charge your clients.
How Much is a Cake Worth?
To set the scene, here’s a quick illustration of why it’s simply impossible to determine the best freelance rates without putting in a considerable amount of thought.
I currently live in a medium-sized town. It’s a town where we’re fortunate enough to still be able to sustain quirky independent shops as well as national chains.
If I want a cake, I have an enormous amount of choice. I can go to a traditional bakery and pay a tiny amount for an old-fashioned treat the size of my hand; I can go to the supermarket and buy a whole packet of cheap, mass produced cakes for a similarly small amount; I can go into Starbucks and pay more for something similar, but with the option of sitting on an armchair while I eat it; Or, I can go in the new “Artisan” cake shop and spend as much on a cake as I would on a typical week night meal!
“Why is he banging on about cakes?” I hear you ask! Well, my point is that our fairly small community alone manages to sustain all of the businesses offering all of those options.
The freelancing community is global – and absolutely enormous by comparison to my local town. As such, trying to determine “standard” freelance rates for anything from design to writing to secretarial services is completely futile.
It’s like trying to decide a single, worldwide price for a cake.
With hindsight, I think this may be a dreadful analogy, so let’s move on!
Setting YOUR Freelance Rates
So where DO you start?
There are four things you need to think about when trying to ascertain the freelance rates that YOU should charge:
- What other people are charging and what customers get for that price.
- Where exactly you fit in within the range of options.
- How much you need to earn to make a living.
- How much you want (or need) the work.
Let’s look at each of those factors in turn:
What are Other People Charging?
It doesn’t matter what it is you do. For most professions, as soon as you start looking into what people earn for their services, you’ll find a variation of rates at least as vast as the cost of cakes in my local town!
Let’s take writing as an example for this one, but keep in mind that this advice is equally valid for any freelance profession – from being a virtual PA to fixing computers to setting up as a mobile hairdresser. (We cover some of those below too).
Take a look on Upwork, and you’ll find clients offering as little as five or ten bucks for a 1000 word article. Meanwhile, on a survey conducted by ClearVoice (a platform that only accepts experienced writers, discussed in this article) there’s no shortage of people claiming to charge more than a Dollar per word.
At the low end, you have people banging out terrible content, often plagiarised and written by people with English as a second language. (Depressingly, there’s still a market for this content.)
Not only is there a market for writing at this level, there’s also a workforce willing to work for the low rates. As discussed in this article on cultural differences, it’s vital to remember that an income that seems laughable in the western world can support a decent standard of living in some countries.
At the other end of the scale, the writers charging four-figure sums for an article are likely to be experts in their field with decades of experience. These will probably be people who’ve written for the likes of Forbes or The New York Times.
So what about you?
Where do YOU Fit In?
The reality is that there are clients paying for work at both ends of the scale. Therefore, what you need to do is work out where you fit in on that scale.
Are you a complete novice looking for your first writing jobs? If so, then you’re definitely nearer the starting point of the scale. But that doesn’t mean you have to work for insulting money.
Are you native English with flawless grammar? That will give you some more earning potential. Do you have technical or real-life experience that’s massively relevant to the client you’re applying to? That could change everything. Are you located near enough to the client that you could attend a face-to-face meeting? For some more “traditional” clients, that might warrant a higher rate.
I’m not even going to try to say what any individual’s freelance writing rates should be. All of this is just one of the four considerations that will help you arrive at the optimum rate for YOU.
Before moving on, let’s look at the kind of considerations you might have if you’re in a different profession.
If you’re doing IT consultancy freelancing, technical certifications can come into play. When I did that as my primary living, having Microsoft and Apple certifications certainly increased my credibility and earning power. Similarly, knowledge of specialist industries, such as design, finance or education is something that can allow you to win far more lucrative work than a generalist computer technician.
Or, say you’re working as a virtual assistant. If you have basic skills, you’ll earn basic money. But if, for example, you have a project management qualification, or experience of working with board members and trustees, you’re potentially much further along that particular scale.
Let’s look at the next consideration.
How Much do you Need to Earn?
How much you need to earn to pay the bills and live the life you want simply HAS to factor in to where you pitch your freelance rates.
When I was a freelance IT consultant in London on a full-time basis, the going rate for doing that kind of work for businesses was around £65 ($85) per hour. It’s a little more than that now.
It may sound like a lot of money, but in reality it has to be that much for the work to be sustainable in a city like London. It can easily take an (unpaid) hour to travel between clients. Add in the cost of travel, taxation, insurance and all the other costs of running a small business, and you end up with FAR less than that in your pocket.
When I moved to Portugal and started to focus more on freelance writing, I was often approached to do technical work when people found out I knew how to do it. However, the going rate there was more like €10 ($11) per hour! These kind of differences can be even more extreme when it comes to the kind of remote work that freelancers perform over the internet.
The point here is that only you know what you need to be bringing in to support the life you have – or want to have. As such, the freelance rates you settle on need to take that into account. This, in turn, can have an impact on where you look for jobs, and the kind of gigs you can undertake.
How Much do you Want (or Need) the Work?
The final point is an extremely important one, even if it’s not particularly obvious.
A crucial consideration in setting your freelance rates is how much you want (or need) each gig.
At one end of the scale, you could be desperate for money to pay the bills. If that’s the case, you might even pitch proposals lower than you think you’re “worth” to get some money in and some food on the table.
At the other end of the scale, you may find yourself in so much demand that you’re having to turn work away, and/or choose which contracts to take on. If you’re fortunate enough to be in this position, you may even end up increasing your rates to scare off cheapskate clients and make sure you are paid what you’re worth.
The reality of freelancing is that you’ll probably spend time at both ends of that scale, often in the space of just a few months!
But simple supply and demand isn’t the only factor in how much you might want or need work.
If, for example, you’re trying to pivot into doing something new, you may even find you “want” some of the low-paid gigs more than you want the high-paying work.
When I first started getting into writing, I needed to build up my portfolio and get some content out there under my byline. One of the first technical writing jobs I did paid me just $12 per article for editorial content about new technology.
As I’ve said above, I’d come from a background of earning $85 or more for an hour of IT consultancy, so this was a tiny amount of income by comparison. However, I wanted the gig enough to make this considerable drop in income more than worthwhile. Not only was I allowed to write about pretty much any techie news I wanted to, I was learning and practising my writing in the process, and gaining those all-important examples of my work.
On the flip side, I’m reminded of some advice an accountant gave me many years ago. He said that if he didn’t enjoy working with a client, he’d keep increasing their rates. Then, one of two things would happen: They’d either go away because they weren’t willing to pay, or he’d earn a higher rate that made putting up with them worthwhile! I’d be lying if said I’d not followed that advice on a few occasions since…
Arriving at your Ideal Rates
The general idea is that once you’ve considered the four things above, you should be able to merge them together and work out what to charge. Doing things this way makes FAR more sense that trying to do a Google search for a “standard” rate that may have no relevance to your individual situation.
What if Customers won’t Pay your Rate?
The short answer to this is that you need to find customers who will.
If you pitch your freelance rates at “bargain basement” prices, you’ll never be short of clients. However, cheap rates almost always attract cheap clients. As discussed above, it’s pretty much inevitable that as a freelancer you’ll sometimes have to do some lower paid work to carry you through the lean times, but being the cheapest PA / writer / editor / cleaner on the block isn’t a particularly great business model.
What Often Happens
Going (very briefly) back to freelance writing as an example, there’s something that happens an awful lot on job boards like Upwork and PeoplePerHour:
A startup will need a load of articles and they’ll see the dozens of job ads offering ten bucks for 1000 words. They’ll put up a similar ad, and be inundated with responses. They’ll sift through 50 or so of them and work themselves down to a shortlist of five or six writers who seem OK. They’ll do some interviews, and then they’ll take on a couple of those writers. By this time they will have invested a considerable amount of time.
They’ll find out within a week or two that good writers don’t write 1000 good words for ten bucks.
All kinds of shenanigans go on at this level; A “good” writer can be good until they win the gig, and then go on to outsource that $10 article to a terrible writer for five Dollars, creaming the difference off the top. Sometimes it’s simply a case of people putting far more effort into their first article than they do on every one after that.
What tends to happen after this is that the client quickly realises that they get what they pay for. That’s why in my Upwork tips article, I talk about only ever applying for the “expert” level gigs.
You’ll likely find clients who’ve already been burned by trying to get a bargain.
The reality is that there are plenty of clients out there that realise the value of quality work and are willing to pay for it – even on platforms like Upwork.
What NOT to do
We’ll end on a few golden rules for things you should avoid.
1. Don’t charge what you think you can “get away with”
Pushing prices up just because you think a specific client has the means to pay them isn’t the same as charging what you need to charge to make a gig worthwhile. It’s short-termist and morally wrong. That’s not to say it won’t necessarily work, but the likelihood is that you’ll quickly end up replaced by a freelancer with more integrity and never hear from the client again.
2. Don’t get knotted up in comparing yourself to others
This rule’s a pretty good one to live by generally! But when it comes to freelancing, it’s an important part of preserving your sanity.
If you’ve determined your freelance rates using the guidance above, you should be charging an amount that seems fair to you for the stage you’re at in your freelance career. It should also be an amount that supports the lifestyle you want.
Online forums and Reddit threads are terrible places for these comparisons. Imagine if I’d told people, all those years ago, that I was writing good(ish!) articles for just 12 bucks a pop, and taken notice of their reactions? Many online environments often turn into a pissing contest with no thought given to the nuance of everybody’s individual freelance journey.
If you’re earning an amount YOU are happy with, that’s all that matters.
3. Don’t think you need to set your rate in stone
One of the joys of the freelance lifestyle is that you don’t have to do just one thing; You don’t have to just offer articles at $100 each; You don’t have to only offer PA services at $15 per hour.
Going back to my $12 articles, I was doing those at the same time as still doing some IT consultancy and juggling the odd website project. I was even doing some writing for content mills at the time (those of you who have been in the freelancing game for a long time may remember the dreaded Demand Studios!)
The point is that you can do lots of things at once and charge completely different freelance rates for all of them. For example, you could earn your “bread and butter” money from one activity that pays your rent and bills whilst doing other work for low rates (or even for free) because it’s moving you closer to a new project or ambition.
This is freelancing – YOU make the rules.
A Final Word: Charging by the Hour
My final tip is a VERY important one:
Wherever possible, try not to charge by the hour.
Obviously you don’t always have the luxury of making this choice. Hourly billing is what’s expected in some professions, but there’s often an alternative:
- If you’re a designer, don’t charge by the hour, charge for the completed logo or book cover.
- If you’re a writer, charge per article.
- If you iron clothes for a living, charge per basket or per garment.
I imagine you see the point I’m making.
If you sell your time by the hour, you’re putting an artificial cap on how much work you can do and how much you earn. As a freelancer, if you’re doing a good job and delivering what’s expected of you, it’s nobody’s business but yours how you manage your time and whether you may happen to do more than one thing concurrently.
I’m increasingly seeing self-employed people of all kinds getting wise to this, and is pleases me. Recently I’ve hired both a removal firm and a “handyman” service, and both were only willing to quote for the job, and not for me to have them at my disposal for a day, or for half a day. It’s understandable that this can perhaps seem more desirable to the client, but – again – you’re the boss.
Hopefully this article has helped you work out exactly how to devise your own freelance rates. For more great advice on freelancing, check out the highly-rated Freelancer’s Bible.