As a freelancer, you decide when, where, and how much you work. It’s theoretically possible to earn any amount you want. Our experience has taken us through the whole plethora of pricing options out there and we want to walk you through the most popular ones, to help you choose the most relevant for you.

Before we begin to dive deep, though, we just want to let you know that a pricing model probably isn’t forever. You need to be ready to rethink and change, based on the evolving circumstances of your freelance work and your needs.

We’ll be going over:

Hourly pricing

One of the most common pricing options for freelancers and one of the most criticized too, yet, it still finds a place on our guide.

According to 2022 data from ZipRecruiter, average freelance hourly wages currently range between $19.95 to $38.46 across the United States.

Hourly pricing is easy, often accused of being very basic yet, on the up side, it’s fairly straightforward: you can charge a set rate for every hour of work.

Pros

  1. Simple: It’s a great option if you’re starting out, for short-term projects and clients who are unsure of the project scope.
  2. Fair pay: Many freelancers find that an hourly rate is the best way to get paid fairly for their time.

Cons

  1. Unprofessional: According to our users, many clients are unhappy with hourly billing and prefer to receive an accurate estimate for the entire project instead.
  2. Not for everything: Depending on your offer, you might need “thinking time” to get the job done and it’s not always easy to explain to a potential customer why they should pay you to think.
  3. Not for experts: The more efficient you are, the less money you make on any given project.
  4. Risky: You usually bill for your time after you’ve worked the hours.

***Bill.com’s survey questioned 1,400 US freelancers and contractors and also found that 45% have had clients not pay them on time***

Enough guessing! Here’s how to calculate your hourly rate

Pulling numbers out of a hat isn’t going to be the best solution so we’ll start by calculating your M.A.R. (minimum acceptable rate).

  1. How much money do you need to make?

    Do a little research on the going rate for freelance work, and think about rent or mortgage payment, utilities, food, transportation, and other bills that all fall under the category of expenses you need to consider when determining your M.A.R. (Minimum Acceptable Rate).

    You’re a web designer, you’ve done your research and found that, since you’re a beginner, you should charge:

    —> $40/hour

    Now let’s estimate expenses:

    —> rent $550 —> utilities (including phone bill): $500 —> other bills: $50 —> food: $500 —> entertainment: $300 —> emergency savings: $300

    Total expenses: $2200