Freelance Pricing: 4 Ways to Price Your Services

Pricing your freelance work is one of the most challenging parts of freelancing. It can feel weird to put a price tag on your work, especially when you’re just getting started and don’t even know what a “fair” price would be, how much others are charging, and what a client’s budget is. 

Fortunately, as more people make the leap to freelance, the conversation around pricing has become more transparent. There are several common ways to structure your pricing that many freelancers have found success with that you can follow. 

Let’s go over a few elements to consider when determining how much to charge, the common ways to price your work, and the best practices to follow around freelance pricing. 

What Goes Into Freelance Pricing: 3 Factors to Consider  

Freelance pricing is nuanced. There are so many factors that can go into what you ultimately charge for your services, but here are a few primary things to consider when putting together your rates. 

Your experience 

How much experience do you have with the freelance service you’re offering? You don’t need to be an expert in your industry to charge fair prices, but you do need to have some work examples to show potential clients the value you bring. 

Set up a portfolio of past projects you’ve worked on to help boost your credibility and showcase your skillset. Having projects to display helps you better pitch yourself and can give you the confidence to charge more. 

How much time you spend on projects 

While you don’t necessarily need to charge an hourly rate (more on that below), you should have an idea of how long most projects take you to complete. When considering the price you want to charge, make sure the price is worth the time you spend.

If you know that a website redesign typically takes you anywhere from 30-90 days to complete, then that helps you figure out how many projects you can take on. From there, you can determine how much you need to charge to cover your expenses for that time period. 

What other freelancers are charging 

One of the best ways to figure out your pricing is to see what other freelancers are charging. Getting an idea of what people are charging and how much clients are willing to pay can help you realize that you’ve been undercharging and empower you to start charging more. 

At Wethos, we always hear from freelancers that they didn’t realize how much they were undercharging until they saw what other freelancers charged for similar services. We provide this insight through our Pricing Recommendations which are crowdsourced from over 50,000 other freelancers like you. See what your peers are charging through our library of 100+ scope of work templates and thousands of pre-built services.

4 Ways to Price Your Work

Knowing what goes into freelance pricing is just half of it. Once you have a general idea of how much you want to charge, the next step is figuring out how to structure your pricing. Here are a few common ways to price your freelance services. 

1. Hourly 

When you’re getting started, one way to price your work is with an hourly rate. It’s common for new freelancers to use their previous annual salary as a baseline for pricing their services. For instance, if your annual salary was $100,000, your hourly rate would be about $50 per hour. 

Using an hourly rate might make sense depending on the type of service you provide — virtual assistance work may be well-suited for an hourly rate, for example — but it can also be easy to undervalue your work with this pricing structure. At a certain experience level, you may be able to write a blog post or design a logo in under two hours. But the value you’re providing with your service is worth over two hours of work. 

Another downside of using an hourly rate is that it’s not a sustainable way to price your work as you scale your freelance business. Not only can it be messy and confusing to track your hours for every project, but hourly rates also put a price tag on your time rather than putting a price on the value you’re providing. 

2. Project-based 

Another common pricing structure for freelancers is a project-based rate. A project-based price, also called a flat rate, means that you charge a flat fee based on a clear set of deliverables outlined in the scope of work. 

Website design and development is a good example of when to use a project-based rate. Let’s say your client wants a website refresh that includes creating a new CMS theme, updating five pages, and reformatting images. With a set of clear deliverables outlined, you can come up with a flat rate that accounts for all of the work involved on your end; this would be your project rate. 

Project-based rates are typically based on an internal hourly rate — as in, you don’t give the client your hourly rate, but you know how much time tasks take you and what your target hourly rate is. If you work backward from how much you want your yearly income to be, you can figure out how many projects you’d need and how long it takes you to complete a standard project to determine how much you’d need to charge per project to reach that number. 

A benefit of fixed rates is that you know exactly how much you’re going to be paid for the project, and your client knows how much it’s going to cost them. This makes it easier to pitch your services to clients and get to “yes” faster. 

A potential downside to a project rate is scope creep. Scope creep is what happens when the project starts to change and your price doesn’t account for these changes. For instance, in the website refresh example, scope creep could happen if the client needs additional pages and expects them to be included with the original price you proposed. 

3. Retainer 

A great way to receive consistent and predictable income is by using retainers to price your work. A freelance retainer contract guarantees an agreed-upon set of deliverables for a set price, usually on a monthly basis. Retainers can be a beneficial way to price freelance work if you’re a social media manager, virtual assistant, email marketer, blog writer, or any other role where you work with a client on an ongoing basis. 

Retainers are similar to a project-based rate in that you receive a fixed price for your work which is beneficial if you’re seeking consistent income.  But they’re also similar in that they can lead to scope creep. If you want to use retainers for your freelance business, you need to make sure there’s a clear proposal in place that outlines exactly what services and deliverables the retainer includes. 

4. Value-based 

Finally, one of the best ways to price your freelance work is through value-based pricing. Value-based pricing is simply charging a price that makes sense based on how much work is involved on your end and how much value the project is bringing to the client. This pricing structure puts an emphasis on the work involved and the results the final project will generate, rather than accounting for how much time it takes, your experience level, or any other factor that the other pricing structures consider. 

Value-based pricing can be tricky to figure out when you’re first starting out, but with each project you complete, you’ll get a better feel for how much work is involved and the value you bring to the table. 

Freelance Pricing Best Practices 

No matter which structure you use to price your work, there are a few things to keep in mind when it comes to freelance pricing. Whether you’re new to freelancing or have been at it for a few years now, here are a few best practices to follow to make sure you’re getting paid for the value you provide and keeping up with demand. 

Track your spending and earnings 

As a freelancer, you’re also a business owner. And unlike being an employee, your earnings don’t just go directly to your pocket. Everything that you earn goes towards paying yourself, paying taxes and expenses, and paying collaborators or vendors (like an accountant). 

Your price directly impacts the rest of your business. That means if you want to earn $60,000 a year for your personal salary, you actually need to earn anywhere from 20-30% more than $60,000 after you factor in taxes and expenses for running your business. 

This is why it’s important to track how much you need to earn to cover your personal and business expenses. After seeing exactly how much you’re earning, setting aside for taxes, and spending on expenses, you may just realize that it’s time to raise your rates, which leads to our next best practice…

Raise your freelance rates 

Raising your rates is the only way to sustainably grow your freelance business. How often you raise your rates depends on a few factors. For instance, if there’s a ton of demand for your service, you can reasonably raise your rates to accommodate more work. Or, maybe you realize that you’re undercharging based on what other freelancers are charging (more on that below). Some freelancers also choose to raise their rates with every new project that comes their way until they get to a price that feels right. Pro tip: If every client says yes to your rates without question, you’re probably undercharging. 

Raising your rates sounds intimidating if you’ve never done it before. There are a couple of ways to increase your pricing: Propose a higher rate for the next project inquiry that comes your way and communicate to your current clients that you’re raising your rates. If you’re raising your rates with current clients, be sure to emphasize the reason for the increase, the value you bring, and options for them if the increase doesn’t work for them.   

Create a reliable invoicing process  

After you’ve set up your freelance pricing, the next step is getting paid. To make sure you’re getting paid on time and ensuring steady cash flow for your business, review your invoicing and payment process to see how you can improve.

For example, if you find that cash is tight between projects and you’re waiting for your next paid invoice to come through in order to get started with another project, consider adding deposits to your process. Getting an upfront payment can help maintain a steady cash flow so you can continue running your business with peace of mind. 

You can also set up a consistent invoicing cadence to make sure you’re getting paid on time, every time. Use an invoicing tool to schedule invoices to automatically send to your client according to your preferred cadence, whether that’s monthly or bi-weekly. 

Be aware of what other freelancers charge 

As we all know, the economy ebbs and flows, and with it so does the demand for freelancers. Always stay tapped into what other freelancers are charging for their services. You may realize you’re significantly undercharging or you may get ideas for services you can offer to make your pricing even more valuable. 

To get instant insight into what other freelancers charge, refer to the crowdsourced pricing recommendations in our proposal scope of work template library, or by comparing your rates with our proposal pricing calculcator.

Pricing your freelance work can be tricky if you don’t know where to start. But with insights into what others are charging, a few business-minded principles in mind, and a strong understanding of what you bring to the table, you can confidently price your freelance work in a way that makes the most sense for your business. 

Wethos analyzes hundreds of thousands of data points to generate proposal and service pricing recommendations for freelancers and studios. See how your rates compare to others with Wethos Proposal Pricing Calculator for free today.