Confused on how to set your rate as a freelancer? We’ll break down the five factors you should consider when setting your rate then show you real freelancers’ rates to help you get started.
View Video on LoomWhen setting your freelance rate, there’s a lot of flexibility regarding how much you can charge. As a freelancer, what you ultimately charge is completely up to you. However, pricing yourself too high can be a detractor for potential clients, and pricing yourself too low can leave you without enough consistent income.
If it seems like there’s just no “right” answer when it comes to pricing yourself, consider the following factors.
Your freelance rate will be based on a variety of factors, such as:
The more experienced you are, the more you can charge. If you are a student just beginning to study a topic, you may select a fairly low rate. On the other hand, if you have several years of experience in the service you plan to offer, you should select a higher, more competitive rate.
Certain industries will pay more simply due to the nature of the work. For example, engineering tends to be a more profitable industry than social media management, and thus, freelancers offering engineering services tend to charge more. To explore industry standards, check out websites like the Editorial Freelancers Association.
If your industry doesn’t have a similar database, consider reaching out to other freelancers in your network. Before asking, make sure it’s someone you have a solid relationship with. While transparency is important and helpful, not all freelancers are comfortable sharing what they charge. This certainly shouldn’t be a question you just slide into someone’s LinkedIn DMs with.
What you charge will also depend on the pricing strategy you choose. When freelancing, there are two main pricing strategies: hourly rates and value-based pricing.
Hourly rates are just as they sound -- you make a specific amount for each hour you work. Hourly rates are perfect for work that is tied to your time. For example, if a client wants to book you for customer support services 5 hours per week, you should charge that client an hourly rate.
Value-based pricing is the idea of setting your rate based on the overall value of the service, not the amount of time you put in to do it. Value-based pricing has a variety of benefits. For example, as a blog writer, it may take you two hours to write and edit a piece on, let’s say, mental health. If you charged $20 per hour, you’d make $40 per blog. 4
However, as you write about mental health more, it will likely take you less time to write each new blog. If your second blog takes you an hour and a half, you’d be making less than the first blog you wrote, even though you technically have more knowledge and experience the second time around.
With hourly rates, you can often end up penalized for being faster at what you do. Setting a value-based rate, such as a $40 per blog flat fee, allows you to charge what the service is worth rather than how much time goes into it.
As a freelancer, you are considered self-employed. So, when you receive money from a client, taxes won’t be automatically taken out as they would with a traditional job. It is your responsibility to save a portion of your income for taxes.
While the amount you pay in taxes as a freelancer will vary based on your income, reputable tax resources encourage freelancers to save at least 30% of their income for taxes.
When setting your rate, it’s important to remember that around a third of what you charge will end up with the IRS. So, while $30 an hour might sound great upfront, remember that you’ll only net around $21 an hour after taxes.
If mental math isn’t your jam, use our free freelance pricing calculator to see how different rates will net out in the end. Note that the pricing calculator factors in platform fees for Pangea users, which may or may not be applicable to you.
The most important factor in determining your freelance rate is your confidence level. It may sound funky, but here’s why.
If you aren’t comfortable with and confident in your rate, it will show to prospective clients.
Now of course, don’t underprice yourself because your imposter syndrome says you should. But by the same token, don’t overprice yourself to the point that your voice shakes when you tell potential clients on discovery calls.
Go with a rate you feel confident saying out loud.
While the 5 factors listed above are most important, there are a few others you may want to consider, such as:
Rate transparency is incredibly important, especially in the freelance space. Generally speaking, as a result of the factors discussed above, most Pangea freelancers charge as follows:
The lowest rate we recommend charging, even as a beginner with no experience, is $15/hour.
Here’s a few examples of specific Pangea freelancers, their experience level, and their base rates for the services they offer.
1+ years experience in marketing
$40/hour base hourly rate
$0.20/word for content writing
2+ years experience in design and marketing
Negotiable base hourly rate
2+ years experience in graphic design
Negotiable base hourly rate
10+ years experience in media arts production and marketing
$30/hour base hourly rate
Less than 1 year experience in video, audio, and digital marketing
$20/hour base hourly rate
Determining your freelance rate can be confusing. But as long as you think critically about your experience level, the industry standards, and how much you’ll be dishing out for taxes, you’ll be set. Remember, the bottom line when setting your rate is it has to be something you’re comfortable and confident with.
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