How to Set Your Freelance Rates & Never Get Ripped Off Again

Freelance hourly rate
Figuring out how to price your freelance services is tough. Especially if you’re just getting started. There’s a lot of conflicting information out there and the topic itself can be daunting.

I’m focused on helping other freelancers be successful, so in this post I share what I know about freelance pricing and how to ensure that you get paid every single time.

Your situation is unique

First it’s important for you to understand that every freelancer’s situation is unique. You might be a student fresh out of school or a parent with two kids. There’s a lot that goes into how you run your freelance business and how much you should charge.

With that said, take what you’re about to read into consideration based around your unique situation: living arrangement, responsibilities, current bills, work experience, education level, the types of clients you’ll work with, etc.

How to calculate your freelance hourly rate

Figuring out your hourly rate is fundamental to your freelance career. Like I mentioned before, there are many factors to consider when determining what to charge, and a large part of the process will be trial and error.

Not every freelancer charges by the hour, but having a rate in mind serves as a good fallback and will help you make accurate project estimates.

Click here to use my Freelance Hourly Rate Calculator!

If you’re just starting out, you may not be able to charge your ideal hourly rate, so, once you’ve calculated it, adjust depending on your skill level, experience, and the market’s demand for your services. This may fluctuate your hourly rate by ± $10–30, but expect to raise your rate eventually once business starts to pick up.

When I first started freelancing I was charging $35 an hour. I just graduated high school at the time, so I didn’t have too much experience with dealing with clients, but I had the skills in design. It just comes down to what your goals are, and what you feel comfortable being paid. Obviously if you think you’re going to charge $100+ right out the gate, then you can expect not to work with any clients. Be realistic and go with your gut feeling.

Also it’s important to mention that if you’re coming from a full-time job, an hourly rate of $50+ might seem high, but you have to consider health insurance, additional tax burdens, and the significant portion of your time which will be spent on un-billable work (like negotiating with clients). Once you consider these factors, your adjusted hourly rate will actually be much lower.

Pricing projects

Now that you have your freelance hourly rate calculated, it’s time to learn how to apply it towards client projects.

When you do get a project lead and it’s time to estimate the cost, start by understanding its requirements. Break the project down into components and estimate the time it’ll take to complete using your new hourly rate.

Over time you’ll get a firm understanding of how long tasks will take to complete and what you’ll charge per project.

Pricing in general is very situation dependent and it’s something you’re going to have to learn with experience. (Like everything else in running a freelance business.)

When pricing a new project ask yourself these questions:

  • What value do you bring to the table?
  • Does the client pay slow? (Some clients may pay up to 30 days after you complete the project, a common practice referred to as “net30.”)
  • Will the project require administration work or support?
  • How often will the client like to meet or chat?

Make sure you have adequately accounted for these and any other potential variables in your final estimate.

The task now is to deliver an estimated price to the client which maximizes your earnings but doesn’t scare them away.

The worst that could happen is they say no and you lose the client. The chances of this happening will slim if you’ve shown the value you bring to the project. Typically, a properly sold client is more likely to use your first price as a jumping-off point for negotiation.

Once you have a price in mind, you’ll need to deliver this price to the client in the form of an estimate or a quote. An estimate gives the client an idea of how much the project will cost, but this doesn’t guarantee a final price. A quote is a firm price that is agreed upon before you start any work. Clients typically prefer this method, because they know exactly what they will have to pay.

An estimate or quote can be delivered as a standard email message or as a PDF documenting your detailed process and the project’s cost.

For more on how to land client projects, check out my complete process post with email samples included.

How to ensure you get paid every time and never get ripped off

You may hear “client from hell” stories about freelancers not getting paid, and it is something to worry about if you don’t have a planned process in landing projects.

I’ve luckily never dealt with a client not paying, but that’s because I never do any work without receiving some sort of payment, or at the very least I never deliver workable files.

Before you do any work whatsoever, get a contract signed and a down payment. I typically request 50% upfront, and I use Freshbooks to send my invoices via email.

If a client has an issue with this, then that should raise a red flag. Clients should have full trust in your services, and in no way should you do any work to prove your worth.

After you’ve received the down payment and you’ve finished your work, be sure to request the final payment before you deliver any final files. If you’re designing a logo, send concepts at a smaller size in which the client can’t do anything with them. This will help in the case of a client getting a workable file and running with it.

CLIENT: Yeah, we’re not paying for this.

FREELANCER: Why not? I’ve spent three weeks on this.

CLIENT: Because we can just use the sample you sent us. Think ahead next time.

FREELANCER: But it has the words ‘sample’ across it and it’s four times too small.

CLIENT: Ah. Crap. We need you to send us the final version then.

FREELANCER: After I receive payment, sure.

CLIENT: Is that really necessary?

“Clients From Hell” submission

To summarize this process for landing client projects and ensuring that you get paid every time:

  • Brief the project: understand the client and their needs.
  • Using your hourly rate, base the project cost off of their needs, your time, and ultimately your value. If needed, be flexible within reason and always go with your gut feeling.
  • Get a contract signed and invoice for a down payment (typically 50% upfront).
  • Start the project and do not deliver workable files in the process.
  • After project approval, invoice for the final payment.
  • Deliver the final files and get feedback on how the project went.
  • Ask for referrals.

Your process on pricing and landing projects will get easier with experience. I hope what I’ve provided here can really help fill in the gaps and give you the confidence you may need to get started.

Have any other questions?

I obviously didn’t cover everything there is to know about figuring out what to charge and how to price client projects, so if you have any other questions or if you have your own method of pricing, leave a comment below. I’ll try my best to answer your questions, because again, I want you to succeed at your freelance career!

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