How to calculate your freelance rate?
Setting the right rate is crucial for freelance success. You can't just look at a salary and divide by 2000 hours, because as a freelancer, you have unbillable time (admin, sales, marketing) and business expenses.
The Formula
Total Target = Desired Income + Expenses
Total Billable Hours = (52 - Weeks Off) × Billable Hours/Week
Hourly Rate = Total Target / Total Billable Hours
Tips
- Billable Hours: Most freelancers can only bill 20-30 hours a week realistically. The rest is admin work.
- Expenses: Don't forget software subscriptions, new laptop funds, and self-employment taxes (if applicable).
- Retainers: Monthly retainers provide stability. Offer a slight discount for guaranteed monthly work.