How Much Should You Charge as a Freelancer?

Start from what you want to keep, then work backwards

The most common pricing mistake is starting from a rate that sounds reasonable and hoping it adds up. Do the opposite. Decide the take-home income you want for the year, then work backwards through tax, business costs, and the hours you can actually bill to find the rate that delivers it.

This flips pricing from a guess into arithmetic. The rate stops being a number you defend nervously and becomes the obvious output of your real targets.

Count only the hours you can bill

A full-time employee is paid for roughly 2,080 hours a year. A freelancer cannot bill all of them. Marketing, proposals, admin, invoicing, learning, and the gaps between projects are all unpaid. Realistically you bill 50–70% of your working hours once you are established, and less when you are starting out.

If you price as if every working hour is billable, you will quietly run at a loss. Subtract holiday and sick weeks first, then apply a billable percentage to what remains.

Add the costs an employer used to hide

Employment bundles a lot of invisible value: payroll taxes, paid leave, equipment, software, insurance, and a pension. As a freelancer you fund all of it from your rate. List your annual business expenses and add a tax margin on your profit so your take-home target survives after the bill arrives.

Move from cost-plus to value pricing

The rate you calculate is a floor — the minimum that keeps you sustainable. It is not a ceiling. Once you know your floor, price the outcome you deliver, not the hours you spend. A project that earns the client €50,000 is not worth less because you are fast.

Use the floor to walk away from work that pays below it, and use value to price above it whenever the result justifies it.

Hourly, fixed price, or value — and when each one fits

Hourly billing suits work whose shape you cannot predict: ongoing support, exploratory research, anything where the scope moves weekly. It protects you from open-ended commitments, and it caps your income at your available hours, which is why nobody stays there forever.

Fixed price suits work you have done before and can scope in a sentence per deliverable. It rewards you for getting faster, which hourly billing punishes. It also transfers the risk of the unknown to you — which is why it needs a buffer sized to how much of the work is genuinely unfamiliar.

Value pricing suits work where the outcome has a number attached that the client already accepts. Not "this will help your business" but "this recovers roughly £4,000 a month you are currently losing at checkout". If you cannot get the client to state that figure themselves, you do not have value pricing — you have a fixed price with an optimistic story attached.

What to charge when you have no track record

The honest answer is that your floor does not change because you are new. Your costs are the same, the tax is the same, and the hours you cannot bill are actually higher at the start, not lower. Pricing below your floor to win early work means running at a loss while you are least able to absorb it.

What legitimately differs is the ceiling. Without a portfolio you cannot command the premium that proof of results earns, so start at your floor rather than above it, and raise deliberately as evidence accumulates. Concretely: take the first two or three projects near your floor in exchange for a testimonial and permission to show the work, then move up.

Avoid the two traps at either end. Free work for exposure almost never converts into paid work — the client who would not pay you now will not pay you later. And a rate copied from a forum post is someone else's costs, someone else's country, and someone else's billable percentage.

How to find out what the market actually pays

Published rate surveys are a weak signal: self-selected respondents, wide ranges, and usually a different country's tax and cost structure. Treat them as a sanity check on your order of magnitude, not as a target.

The stronger signal is much closer to hand. Ask freelancers in your field directly — most will tell you, especially outside your immediate competitive circle, and one honest conversation beats a dozen surveys. Watch which job postings for equivalent employed roles list salary bands, then reason upward from there, since a freelancer needs materially more than a salaried equivalent to net the same.

The strongest signal is your own pipeline. If every quote is accepted immediately, you are below market. If roughly one in four is declined on price, you are about right. If nearly everything is declined, either the price is genuinely too high or you are quoting to the wrong clients — and those two need very different responses.