Freelancing
How to price freelance work
Underpricing is the most common way freelancers quietly go broke while staying busy. Here’s how to set rates that actually work.
Start with the number you need
Don’t pluck a day rate from the air. Work backwards:
- Your target income, what you actually need to earn a year.
- Add your costs, software, equipment, pension, tax, time off.
- Divide by billable days, and here’s the catch: you can’t bill 5 days a week, 52 weeks a year. Between admin, sales, holidays and gaps, a realistic figure is often 120 to 160 billable days a year.
Target income + costs ÷ realistic billable days = your minimum viable day rate. Most people are shocked how high it needs to be. That’s the point, the naive “salary ÷ 220” maths is why freelancers underprice.
Day rate vs value-based pricing
- Day rate is simple and fair for open-ended or ongoing work.
- Value-based / project pricing ties the price to the outcome, not your hours. If your work makes a client £50k, charging £2k of “time” leaves money on the table.
The move as you get established: quote fixed project prices based on the value delivered, using your day rate only as a floor to check you’re not underwater.
How to raise your prices
- Raise rates for new clients first, it’s lower-risk.
- Give existing clients notice, tied to a new period or scope.
- Remember: losing a low-paying client to make room for a better one is usually a win.
Know your real numbers first
You can only price with confidence when you know what a project actually costs you in time, and whether past projects were profitable or just busy.
Log your hours against each project, even roughly, and compare them with what you were paid. After three or four projects you will know your real hourly rate, and your next quote can be grounded in that rather than in hope. The freelance rate calculator does the sums.
Related: how to write a proposal clients say yes to and how to write an invoice.
General guidance, not financial advice.