How to Set Your Freelance Rates

A 5-Step Guide to Earning What You’re Worth as a Freelancer

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Photo by Burst

Deciding on Your Target Annual Income

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  • Bills
  • Utilities
  • Groceries
  • Emergency fund

Identifying the Costs of Doing Business

With income comes expenses, it’s just a way of life. For this reason, it is incredibly important that you remember that your annual income and annual earnings are two very different things. With doing business comes the costs associated with doing business. These costs are what you should always consider first when establishing your freelance rates. After all, you won’t see a profit until these costs are accounted for.

Time = Money

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  • Vacation/Holiday Times
  • Sick Days
  • Whether you will work strictly weekdays or weekends as well

Consider Your Hourly Rates

Now that we have established our target annual income, the costs of doing business, and our annual investment of time, it’s time to get to what we all came for: calculating your hourly freelance rates. Doing this is simple enough and requires the use of a fairly easy-to-understand formula:

Remember the Value of Your Services

Now, although we have established a minimum hourly rate, it is crucial that you understand that not every job you complete as a freelancer should be based on hourly rates. Why? Charging an hourly rate serves you well when the job calls for an hourly rate. When it doesn’t, you’re putting a huge limit on one thing: time. There are only so many hours in one year to earn money and limiting yourself to hourly rates can put a huge restraint on your earning potential.

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Freelance Writer. Blogger. UFO enthusiast and lover of space. Email me at:

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