Whether you’re an engineer, a copywriter, or a marketing expert, all freelancers have one challenge in common: setting a reasonable hourly rate. Beginners in particular often have a hard time deciding their hourly rate. Read on to avoid making rookie mistakes when it comes to setting your freelance rates!
Oftentimes, freelancers undervalue themselves and offer their services for cheap – especially at the beginning of their careers. They fail to consider the operational costs of their business and/or the ability to cover their monthly expenses throughout the year. In addition, some of them are still stuck in the “employee” mindset.
According to our freelancer study, one thing is certain: high qualifications and years of experience equal higher hourly rates. However, good communication and negotiation skills can also affect freelancer rates.
Finding it difficult to perform realistic calculations on how do you calculate your hourly rate?
- How to calculate and work out freelance rates
- Freelance rates by industry
- Pricing projects as a freelancer
- General tips on how to price yourself as a freelancer
- How to stop underselling yourself
- Conclusion
How to calculate freelance rates
Firstly, your hourly rate calculation should take into account any and all monthly costs and expenses that you as a freelancer might have. This includes both private expenses (e.g. rent, food, clothes) and professional ones (e.g. office space, working materials, taxes).
According to our last freelancer survey, the average freelancer rate among IT professionals in 2025 is €98/hour. While your own rate may differ, you can use this value as a basis for your own calculation.
Later on, we’ll take a closer look at the profiles of the freelancers who answered the survey – predominantly working in SAP, consulting and management, IT infrastructure, development, engineering, graphics, content, and media.
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#1 Calculate expenses
The first, most crucial part of defining your freelance rate is to calculate all your expenses.
Take into account any and all costs from less obvious ones such as internet fees, website hosting, and software costs to more general costs such as rent, utilities, office equipment, legal and accounting, taxes, insurance, etc.
📖 Interesting read: What insurance do you need as a freelancer?
Make a list of every little expense you incur as a freelancer.
It can be easy to forget small things such as the cost of office supplies, certifications, travel, marketing, branding, etc, so make sure you make a note of these expenses as well.
In addition, your salary should be counted as an expense. Think of what would be your desired income and add it to your expenses.
Tip: If you’re unsure about what some of the expenses are going to be yet as a new freelancer, reach out to freelancers within your industry and get talking!
Please note income taxes change a lot from country to country.
As an example, freelancers in Germany can expect to pay between 8% to 42% on income tax rates depending on the total income.
#2 Calculate working days
Now, it is advisable to determine how many days per week, month, or year you are looking to do freelance work.
Even if some freelancers often work through the weekend, this should not become the norm – especially if you have a family waiting for you!
Additionally, friends that work as full-time employees usually only have time to meet up on the weekends, so it’s important to have this time off for socializing (at least occasionally!)
In order to calculate how many working days you have available per year you must consider potential sick days, days you’ll invest in further training, vacation days, etc.
In most cases the number of days you get from your calculation will fluctuate.
To be on the safe side, we recommend you include a few extra days off rather than overestimate your working days. This allows you to make smarter financial choices.
Tip: Freelancers should not neglect office work, such as completing tax returns and bookkeeping, communication with clients, etc.
How to calculate the number of days of work available:
| Days | |
|---|---|
| Calendar days | 365 |
| Weekends | -104 |
| Bank holidays | -10 |
| Vacation | -25 |
| Sickness | -5 |
| Total working days | 221 |
As a result of our calculation, you have 221 days free for work each year. Considering an 8-hour working day, that would be 1.768 hours/year.
But as a freelancer, you must also consider the time pursuing new clients, phone calls and client communication, administrative work, etc.
Let’s say you can only spend 80% of your time actually working. That would be 6.4 hours a day.
221 days x 6,4 hours / day = 1.414 hours
#3 Calculate your Minimum Acceptable Rate (MAR)
Once you’ve calculated your expenses and working days, it’s time to set your MAR – or minimum acceptable rate. This is the absolute lowest hourly rate you would be willing to work for.
By analyzing your costs and workdays, you can calculate the MAR that best works for you.
While we do not recommend working for your MAR, this is a good starting point for freelancers looking to get a foot into the freelancing world.
How do you calculate your MAR?
((living costs + overhead business costs + salary) / (hours worked a year)) + tax
Let’s run an example:
Expenses: $7,000 x 12 months = $84,000
Profit margin (salary): 25% = $21,000
Cost of doing business = $84,000 + $21,000 = $105,600
MAR: $105,000 / 1,414 hours = $74 per hour
This equation gives roughly your minimum hourly rate. As mentioned above, this is a good starting point but it can always be hard to take into account all the different factors.
As you develop your freelance skills, you may increase your MAR to reflect your skills and knowledge.
Freelance market rates: How much should you charge in your industry?
When working out how to price your work as a freelancer and deciding what would be your hourly rate, you must also analyze your niche and industry.
Look at the competition: How much do fellow freelancers charge? What are their hourly rates?
Some freelancers post their rates online (or price their freelance services packages). Others you could just ask, keeping in mind they might have an interest to over- or undersell themselves.
But it’s not just important to know what the freelance competition gets, more so why it gets it. Find out what they are charging for similar work and for similar ideal clients.
Compare yourself to those working in your field and determine how your experience and work stacks up to theirs.
This outsider information will ensure your freelance rate fits in with industry standards. Moreover, you’ll get an idea of what potential clients are ok paying.
Of course, you can help yourself with average salary and hourly rate research conducted online. So here are the insights gathered on freelancermap and our freelancer survey.
How much do freelancers charge per hour?
| Consulting & Management | SAP | IT infrastructure | Development | Engineering | Content & Media | |
| Freelancer Survey 2025 | €120 | €113 | €98 | €92 | €91 | €76 |
| freelancermap index, June 2024 | $87 | $94 | $87 | $74 | $83 | $60 |
You can research freelance rates for specific skills on your own. Using the freelancermap’s directory, type in your keyword to perform a search and the country you are interested in.
On the right side, you will see a box indicating, for example, the average hourly rate of a web developer in Germany.
💡 Want to explore more freelancer rates?
» Check Bonsai’s rate explorer
Pricing options for freelance projects
You have now calculated your minimum desired hourly rate and while it’s good to know what your hours are worth, charging for your projects by the hour is normally not the best option for freelancers.
There are different pricing strategies you could use to price freelance projects:
#1 Hourly / daily billing
Hourly billing is not good for profit or for efficiency. It requires you to estimate and track every single task and it’s a methodology that doesn’t work for experienced freelancers.
Having the experience and expertise will make the freelancer perform the task quickly but this doesn’t mean the knowledge only costs 10 minutes.
10 minutes it is what it took the freelancer to complete the task but not what is worth it.
We recommend running away from this pricing strategy because it simply does not take into account years of knowledge and experience. If you have a client looking for a time-based price, you could offer daily billing instead.
Please note your daily rate doesn’t have to be an 8h x hourly rate. The number of hours you work is solely up to you and it allows you to adapt and modify the rate for bigger or smaller projects.
When billing your project daily, you can sell a package of several days at a cheaper rate. However, we’d recommend you limit your weekly availability to 3 – 4 days as this allows you time for other projects.
#2 Fixed-price per project
Fixed-price pricing is the preferred option for freelancers as it’s based on the value provided.
With this pricing, the freelancer guarantees the client that the job agreed to will be completed. As a freelancer, you price your work based on the value of the work instead of pricing based on time.
Ideally, you should show the client that by doing X for them, they will get Y leads or Z% increase in revenue. In essence, show them why your work is priced the way it is.
Tip: Always sign a contract and ask your client to pay a deposit upfront before you start working on the project.
#3 Retainers
Freelance Retainer agreements can be a great safety net for freelancers as these guarantee a certain amount of work for a client for an agreed amount of time.
It tends to be on a weekly or a monthly basis and it helps freelancers with having a consistent income. As the work to be done is discussed upfront, it allows freelancers to schedule their time ahead and it can be great for productivity.
If the client has consistent work during a period of time you might want to suggest signing a retainer agreement to the client.
General tips on setting your freelance rates
- Your rates flexible, adapt them as you gain experience
- Choose different pricing strategies for different clients
- Talk to other freelancers to get real market insights
- If you reduce your price, it’s because you reduce project scope
- Increase prices for rush projects (See how to use rush fees)
- Always ask for a deposit for fixed-projects
- Don’t only pay you, make sure you make a profit to grow your business
- Trust your value even if there are cheaper freelancers out there
DON’T undersell your freelance services
As a freelancer, you should never resort to underselling your services. Not only can this have negative effects on your career, it can also stem personal growth.
By devaluing your services, you essentially let clients know that your work is not valuable or that you have lesser skills and expertise than you actually do. Additionally, by setting lower rates, you tend to attract the wrong clients – ones who prioritise cost over quality and are less inclined to increase your rates over time.
Underselling yourself can also help prevent you from investing in yourself – a fact that is important if you want to grow professionally and better your finances.
Signs you are underselling your freelancer work
Figuring out if you’re overcharging your clients isn’t hard – you just won’t get hired for the job or will outright be questioned about your pricing.
Underpricing, on the other hand, is a bit difficult to gauge. You’ll very rarely be told by your client that your freelance rates are too low or that you’re underpricing yourself. They run a business and part of that is trying to get the best deals possible.
But, as stated above, underpricing yourself is one of the biggest mistakes that a freelancer can make. Lack of knowledge about the industry or a lack of confidence in their abilities are the most common reasons why freelancers do this. Trying too hard to win a particular project is also another reason which is the sort of attitude that clients can prey on.
Let’s take a look at some of the signs of underpricing that you need to be on the lookout for:
1. Projects tend to take more time than planned
If you find yourself often underestimating the amount of time you’ll have to put in to get your freelance project done, chances are, you could be asking for less money than you should. If you tell a client it’s going to take you 20 hours to complete a project, they will pay you for exactly 20 hours. You can’t tell them that it actually took you 30 hours afterwards, because everyone will assume you were just slacking off.
The way to avoid this is to always very carefully and realistically consider how long a project will take in advance. Don’t try to impress your clients by showing them how fast you are. Ask for a fair price for the time you are going to spend and deliver a quality product – that’s the best way to impress them without charging too little.
2. Your competition charges more
Before you affix yourself with a price, consider researching what your competition is charging, specifically, your direct competition. These are the freelancers who work in the same industry as you, have similar experience and are applying for the same projects you are. If most of them are charging more than what you are, you are probably underpricing yourself.
3. Your hourly rates haven’t budged for years
The prices for goods and services are constantly fluctuating due to supply and demand. This theory also applies to freelancing because of the constant development that a freelancer goes through.
As a freelancer, you’re constantly learning new things, working on different projects and getting more experience. And so, if everything about your work has changed in the last couple of years but your rates have stayed the same, you should consider raising them.
4. Someone other than you sets your rates
Letting clients determine what your time and work is worth will often lead to underpayment and you underpricing your rates. Don’t be afraid to talk to your clients about how much you’d like to get paid and why. More often than not, clients will accept the number you give them if they expect to get quality work in return.
5. You feel resentment towards your work
If you feel underappreciated or resentful towards your work, it’s a clear sign that you may not be charging enough. You may start to feel like the time and effort you put into your work far outweigh the compensation you get in return – and this is especially true if you are putting in extra hours.
6. You are on the verge of burnout
Constantly taking on too much work but struggling to make ends meet is another indicator that you’re underselling yourself. With a packed schedule, there’s little time for you to take time off for yourself. This can lead to fatigue and eventual burnout.
How to compete with freelancers who have lower prices than you
With freelancing on the rise, freelancers now have more competition to deal with than ever before. According to statistics, there were an estimated 64 million people doing freelance work in the United States in 2023 and 27 million in the European Union.
In addition, according to the results of a new Gen Z survey from Upwork Research Institute, over the past decade, almost 1 million more people each year have done freelance work.
It can be hard to stand out when there are a lot of freelancers competing for the same job you are. To deal with this, freelancers must think like their clients: Whether they pay 20 or even 50 percent less for a given project, it won’t do them any good if the project turns out bad or doesn’t get finished at all.
You have to focus on quality and value and stick to your price. Here are a few ways to do it:
1. Underline your value
We’ve established that the work you do is not about quantity or saving a couple of dollars, but about quality. Now you have to convey that to your client.
Showcase your biggest, best projects and help your client connect all that experience on your CV with something real. It’s also important that you be professional and always stick to your deadlines. Being hung out to dry is the biggest fear that clients have. Earn their trust by showing them this isn’t a risk they’ll have to take when working with you.
2. Pick the right clients
Quality should be your motto. Some clients, however, won’t be interested in that. You can try to convince them, but don’t beat yourself up about it if they don’t go along. Some clients are just looking for someone to do a lot of grunt work for a low rate. Make it clear to them that you’re not that someone.
Also, always remember that the best clients are former clients. They know your rates, they know how you work and if you’re talking about price, they want to work with you again.
Other clients that tend to go for quality over quantity are the ones that have worked with freelancers in the past. They’ve probably experienced the good and the bad – it’s just about convincing them you’re not part of the latter.
3. Have a minimum rate
Setting a minimum rate is an indispensable strategy when you find yourself being undercut by your competition. It sets a line that you’re not willing to cross. A good way to find that magic number is to take the top 60 percent of your projects by pay and not go under their average amount. Keep in mind that this number is there as much for the client as it is for you.
It can be easy to fall into the trap of saying – “okay, maybe if I cut my rate by 10% just this once”. But, more often than not, it won’t be just once – maybe you’ll work with that client again, maybe somebody will find out how much they paid you and will request the same discount. Calculate a minimum rate and stick with it. Don’t forget to repeat the process about once a year, your minimum should ideally go up in that period.
4. Don’t be afraid to say no
Finally, learn when to say no. If a client isn’t willing to pay what you’re worth, walk away. If it’s a negotiating tactic and they still want to work with you, great. If not, then you’re saved from having to deal with clients who value quantity over quality.
5. Build a strong personal brand
A strong personal brand helps you stand out from your competitors and draws in clients who value your skills and are willing to pay premium rates. Remember, clients often choose freelancers based on their reputation and online presence.
And so, beyond showcasing a polished portfolio, you need to actively engage on platforms like LinkedIn, host webinars, write blog posts, or share industry insights on social media.
6. Have an up-to-date online presence
As stated above, clients often prefer freelancers who have an established online presence and reputation. Your online visibility reflects your abilities and so keeping them up-to-date ensures that clients see your latest work and establishments and lets them know that you’re active and relevant.
7. Leverage testimonials
Testimonials allow you to show potential clients that you’re reliable and trustworthy. Utilising them can significantly strengthen your negotiation position and help you stand out from other freelancers. Make it a point to highlight impactful references and showcase your expertise.
Conclusion
In conculsion, setting up rates and deciding how to price a project for a client is a complex decision. It’s important you understand the client’s needs and the pros and cons of the different pricing options.
Once you understand the project, you will be able to choose the best pricing method. And this doesn’t have to be the same choice for every engagement.
Even with the same client, you might want to use a different methodology for a different kind of project. So, select the pricing strategy that works best for each particular project.
One last thing you shouldn’t forget – rates change, just like people do. Don’t forget to reassess what you are worth now and then and check in on the market developments regularly.
42% of freelancers calculate their rates for each new project.
freelancermap’s Freelancer Study 2024
With time you will get better at understanding how you work (hours needed) and pricing new projects. Practice does, indeed, make perfect!
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That’s not how it works in practice, but rather:
– ask around
– throw some random numbers at recruiters and see how they react
– if they don’t complain, you’re too cheap
– if they complain a bit, it’s ok, you’re in the right range or still somewhat below
– if none of them wants to ever talk to you again, you might be over the limit (that’s probably next year’s rate)
– if you extend your contract, raise your rate
– if you’re looking for a new contract, raise your rate
– if you’re in the EU and they are from UK for a job in your country, don’t trust them
– don’t trust them anyway
– if your rate is too low, you’ll get the shittiest jobs
– but if it’s too high, congratulations on being on a management or leading track, though you’ll end up making PowerPoints and Word documents and won’t deliver anything useful ever again
Thanks for sharing your real-life experience, Yannick.
It’s always a good idea to get the lay of the land before you agree on a rate. These are helpful tips and red flags!
I’m sure you’re delivering useful things 😉!
There is a broad world of writing, and different types are valued somewhat differently. If you’re writing SEO content or articles, expect somewhat lower pricing than a more in-depth journalistic gig. There are exceptions to this rule, however. Marketing and ad copy web content, for instance, are generally at the higher end of the freelance pricing spectrum.
Thanks a lot to Natalia Campaña and freelancermap.com for this great article. I’ve been freelancing for 2 years on Perfectlancer and these tips helped me a lot to set my rates correctly and earn more. Hope people found this article helpful to set their freelancing rates and earn good money on Perfectlancer and other similar platforms.