How Much Money Should You Charge as a Freelancer?

Declan Wilson
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It was my first day of self-employment, I had just walked away from my corporate job a mere hours earlier and found myself on a video call with a potential client who needed a new website. I pitched them my ideas, we discussed deliverables, and settled on a timeline.

Then came the question: How much do you charge?

It’s a question every freelancer wants to hear but dreads answering.

In a split second, I did some quick math in my head and gave them a number.

“Okay, we’ll think about it and get back to you,” they answered.

A few days later, I received a call, “The project is yours. Let’s get to work.”

I made good money from that first project. It eventually evolved into a lucrative monthly retainer that helped jump-start my new career.

But things didn’t stay that way. I’ll admit it, after pitching and selling my first project as a newly minted “entrepreneur” I got a little cocky. Well, cocky isn’t the right word, complacent.

After this client dropped a bombshell that they no longer had funds for their website, I desperately scrambled up clients to make up for the lost revenue.

Which meant making the worst professional mistake of my career: I longer knew what rate to charge my clients.

What happened next nearly ruined me.

This is a cautionary tale for all you new freelancers who haven’t quite figured out a good response to “How much do you charge?” Because the answer you give literally can make or break you.

But the answer isn’t difficult to arrive at. It doesn’t take a mathematics degree or some secret knowledge of financial wizardry. All it takes is a deep understanding of what you need to survive comfortably and the gall to demand what you’re worth.

The time I undersold myself

Let’s get back to my woeful tale. Desperate for clients, I talked to anyone and everyone who needed a website built. I eventually came across a guy, let’s call him Bob.

Bob seemed like a nice and reasonable guy. After giving him my spiel, he popped the question: How much do you charge?

I gave him a number (which was roughly half of what my first client paid).

“Are you kidding me?” Bob responded.

I should have hung up the phone and moved on, but my credit card bill seemed to grow by the hour, so instead, I responded, “Oh, did you have a specific number in mind?”

He did have a number. It was one-fourth of what I had proposed.

Dejected, I said I’d take the project, and over the months that ensued, I dealt with the worst professional experience of my life. Bob was demanding, demeaning, and just a plain old curmudgeon.

In the end, I refunded him half of the project because of a mistake that was “my fault” and made just above minimum wage when accounting for all the hours I spent on his website.

It took me a year to recover before I could even take on any new web development projects again.

All of this is to say, knowing your rate is much more than providing you with a livelihood, it weeds out the bad apples who’ll take advantage of you.

Hourly or Project-based

Let’s get into the specifics. Should you charge hourly or per project? I always recommend per project because as you become more proficient with your skills, you may only need a few hours to deliver all of your promises. Why should you lose out on revenue just because you’re efficient with your time?

However, when you’re just starting out, you might need to charge hourly to better protect your time.

So how should you determine your rate?

Let’s start with what not to do. Don’t come up with a number off the top of your head, multiply it by 40 and think, “Yeah, that’s a good weekly salary.”

The 40-hour workweek is for the inefficient. You’re a freelancer now which means there is no chance in heck your schedule will be full to the brim with paid-hourly work. You have to look at your business as a whole. Yes, you might spend 40 hours a week working, but a lot of that time will be spent on non-revenue generating activities: admin, communication, marketing, grabbing another cup of coffee.

Depending on your line of work, you might only spend 40–50% of your time that is actually paid for by clients. Actually, it’s probably a lot less than that. I know it sounds drastic but we humans are not very good at estimating how well we utilize our time.

Taking that into consideration, let’s start with how much money you need to survive one month. If you’re an avid budgeter (like me) then you should know this number to the nearest dime. If not, log into your bank account and get out a calculator.

Add up all your essentials — rent, utilities, food, debt, insurance, etc. — as well as a little buffer to cover any unexpected expenses. Let’s say you arrive at $4,000 a month as your number.

Now, divide this number by 0.7 to account for taxes and business expenses. (Psst, if you want to pay less in taxes, I’ve written how to legally do that too). That puts us at $5,715 rounded up. Divide this number by a conservative estimate of how many hours a month you’ll devote to paid client work (let’s estimate 70 hours). Round up to the nearest ten which puts us at $90 per hour.

If you charge hourly, demand this rate and nothing less. If you want to convert to a project rate, overestimate how long the project will take (seriously, it’ll take longer than you think) and multiply by your rate.

You will end up with a number that feels uncomfortable. You might be tempted to bump it down a few bucks.


You’re on this path for a reason. Your time is worth it. You are worth it. Name your number and stick to it.

An alternative method

Last week I had the pleasure of speaking with Stephen Warley, aka the Self-Employment Guru. (Just kidding, Stephen doesn’t call himself that. But he has been working for himself for the past 20 years, long before it was cool, so he’s definitely earned the title.)

Stephen has a unique way of arriving at his number. First, he’s developed a Lifestyle Calculator that makes all this math a lot less complicated. But for those who are just starting out, the fear of asking for a high rate is still there. So Stephen recommends a way around this.

When you’re starting out, do three case studies for free. If you can do something for a low cost start that way. You want to get testimonials out of these three first case studies and document it so people see how you work and what people said about how it was like to work with you.
Then look at your first five customers, that’s where you’re going to charge your first rate, do a lifestyle calculation so you’re not charging 50 bucks. Charge something that is going to compensate you for your experience and all the work you’re putting into your business. Then after the next six to ten customers, increase your rate again. Keep doing this so that way you feel like it ties your experience to your confidence.
As that increases, you’re gonna feel more confident about charging more. But also, when you’re working with clients, they feel like they’re getting a deal. This is generally how I’ve priced everything I’ve ever done. And it works, I feel good about it, money’s coming in, and every time I raise my rates, people keep paying more and more because I got better and better at what I was delivering.
So that’s the little curve I recommend to people so that way you’re never stuck in this in imposter syndrome and getting paid $25 an hour forever.

Whichever method you use, the point is to arrive at a number that feels uncomfortable but also excited, like cartoon-money-eyes excited.

Attract better clients

You might be wondering, “Isn’t the goal to get paid? Why should I demand such a high rate?”

True, you are in fact running a business and the goal of said business is to make money. But would you rather work 60 hours a week with a dozen needy clients, or make the same amount in 30 hours with a handful of pleasant clients who value you and your work?

A long time ago, I went the cheap route and paid for it dearly (literally). Never will I do that again. Now I have a number that never budges. It’s helped me to say no to a lot of opportunities but say yes to ones I’m excited to work on.

Free yourself from the imposter syndrome, attract better clients, and get paid what you’re worth!

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Stay-at-home dad. 9-to-5 escapee. Aldi aficionado.

Baltimore, MD

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