A Guide on Calculating your Freelance Rate
As a freelancer, determining your salary for clients can be a confusing task. With such a wide range of clients, locations, varibles, how do you calculate your freelance rate in a way that is fair to both you and your client?
You can calculate your freelance rate by defining your needs, goals, expenses, and value as a freelancer.
This will determine what you need to earn to reach your annual income and what you need to do to reach those goals. There are other factors at play, but these are the fundamental things to calculate your freelance rate. Read on to learn more about how to calculate your rate and what you need to do to reach your goals.
What is a freelance rate?
Before we get into the details of how you calculate your money, let's look at what exactly a freelance rate is.
A freelance rate is a collective estimate of how much someone charges for their services based on their skills, experience, and education.
However, there are other factors you need to consider, such as the quality of the client, the range of opportunities, or learning experience. It's important to understand what a freelance rate is because you need to know what you're offering. Some clients are willing to give you a chance, even if there's a learning curve at the beginning, and these jobs don't always pay well at first.
If there's potential for growth and or a chance to learn something new, your freelance rate should change accordingly. It can be confusing how the different circumstances affect your choice of rate, so it's best to be flexible when determining your services. How much you charge your clients for your freelance services depends not only on the factors mentioned above but also on factors like confidence, adaptability, and mindset.
Setting a freelance rate
Next, let's go into more detail on how to set up shop and strategize how to set your freelance rate.
Here are some of the key factors to consider when it comes to setting a freelance rate.
- Education
- Experience
- Value
Education
Work platforms like Upwork or Fiverr all have a section where you can indicate your previous education. And that can be a deciding factor in calculating your freelance rate because what you learned in school will be valued more highly by clients than someone who studied something irrelevant to their skillset.
Also, anyone in the world can publish their profile on these platforms, which means that the quality of education varies greatly, which ultimately affects how clients view your profile.
Experience
Although an education in your field is beneficial, it's not necessary when it comes to setting your freelance rate. If someone has years of experience in their field, that's usually the more desirable option for clients, regardless of their educational background.
That said, it's important for everyone to keep learning new things about their craft and not become complacent. Someone who's been a graphic designer for ten years may think he/she knows it all, but it may be a student who's just learned all the current requirements for a job that's better qualified.
Value
It will take some research to know your value as a freelancer. And this ties back into experience and education, but reading about others' experiences is a great way to gauge your value.
Then you can see what others are charging for their services, and you can compare how you measure up to them.
Try not to get discouraged when you're first starting out because the range of what people charge is quite large. So make sure to be honest with yourself, and determine your value by establishing your strengths and weaknesses.
What to charge for your services
There can be many gray areas when it comes to knowing what to charge for your services. But how do you determine your prices for your various skill sets?
Typically, you should charge either by project, time, or milestone. And how much you charge is determined by your overall value as a freelancer.
On job platforms such as Upwork, for example, many clients have one-time projects that need to get done quickly. The rate of these gigs will depend on the project size and experience level, and can range anywhere between $0-$2000 per project.
You can determine what to charge based on these factors. But clients on job platforms are known to undervalue freelancers, so it's always encouraged to know your worth and stand your ground with your rates. Another way to know what to charge for your services is the various skills you have to offer.
For example, as a copywriter, your main skill set is with words. But many clients favor people who have a variety of skills, such as design or coding. By learning more skills, your value goes up as a freelancer, and you should charge your clients for specialized services accordingly.
Know what you're worth
Knowing your self-worth is a strong indicator of how to calculate your freelance rate. There are some important questions you should ask yourself to determine your value.
1. What are your goals for your annual income?
Establishing your annual income will give you clarity on what you need to do to achieve your goals. But it can be hard to know exactly how to calculate your rate in a long-term scope.
Fortunately, there are useful tools such as income calculators for freelancers where you can adjust your rates and determine how much you'll make in a year.
2. What expenses do you expect to pay?
Everyone has a different standard of living that they consider comfortable. And it's important to know what you're adding to your weekly/monthly bills. Start by making a list of all the essentials you'll need to pay for. E.g. Rent, utilities, groceries, going out, shopping, entertainment, insurance, vacation, etc.
This will give you an idea of what a comfortable lifestyle looks like to you and determine how much you need to make to fulfill those expenses.
3. Do you feel confident in yourself?
Studies have shown an abundance of confidence can lead to bigger paychecks. You can have all the experience or educational background you want, but at the end of the day, if you don't believe in your capabilities, no one will want to work with you.
There's no real tangible way to measure confidence to a dollar value, but it will provide mental clarity in knowing what you have to offer and what you think you deserve in payment.
Conclusion
The more experience you gain and develop your skills, you'll notice your confidence will grow along with your progress. That's why it's important to be proactive in determining your rates.
So make sure to do your research, develop your skillset, and use helpful tools, so you're well-prepared for your clients.
Talk about your experience and share your rates on our freelance rates list!
Written by Genki Hirano
November 22, 2022