When I started freelancing in 2014, determining my hourly rate was pretty daunting. What’s too high? What’s too low? Will this be enough to support my monthly bills? When someone has a full-time job, they’re given a salary that sets a financial road in place for raises, promotions and new positions ahead. When that person starts freelancing, a new road is set before them with a million different turns to take.
There’s an actual formula I recommend to anyone needing guidance in determining their rate as a freelancer. It starts by researching the salary you would ideally have if you were employed full-time for the services you look to provide your clients. For example, at the time this article was written the average national salary for a full-time marketing manager is around $80,000 according to glassdoor.com. If a person wants to freelance their marketing skills and is at a manager level in years of experience and general expertise, this is a good number for them to use for our freelance formula and it looks a little something like this.
From here, round that number to the nearest five. So in this case, the hourly rate is $85. Now that you have your hourly rate, it’s up to you to determine if that number will provide enough financial stability for your needs and the amount of hours you want to work. Whether you charge less or more is entirely up to you. You may charge less if you want to work with a client that has a smaller budget, or charge more if you specialize in a high-demand field of work. This formula is intended to give you a starting point to determine an hourly rate that is reflective of your value and what you can provide your clients with it.
Use the calculator to determine your hourly rate here.
Another approach to freelancing is offering flat fees for routine services. For example, a graphic designer will more than likely be hired for designing repeat services like logos, business cards and social media headers. If that designer knows it takes an average of 10 hours to design a logo, they can use their hourly rate (let’s say it’s $45) to determine a flat fee of $450 for their logo design service and so on.
Also remember that as a self-employed person, you are responsible for taking out your own taxes, contributing to your own retirement plan and paying for health insurance. This is why we multiply by two to get our final rate. So if the number sounds higher than you anticipated, it’s for good reason.
By: Audrey Adair
Audrey Adair is a freelance communications consultant and founder of The Scope - a website providing resources and community for the self-employed. She had the idea for The Scope after about a hundred different people asked her the same exact question, “How do I do what you do?” With the freelance economy predicted to make up half of the total US workforce within the next decade, it's her goal to provide aspiring independent talent with the know-how and confidence to take on this burgeoning and in-demand industry.