Freelancer Rates: 7 Suggestions for Setting Your Fee

Independent contractors enjoy the freedom and flexibility of choosing how and when they work, but with that freedom comes the responsibility of setting their own rates to achieve professional success and personal peace of mind. If you’re an independent contractor, consider these seven quick tips for setting your freelancer rates. 

Freelancing can be a liberating and rewarding way to work. It offers flexibility, entrepreneurship opportunities, and the ability to carve out your own specialty all while working remotely.

When you first begin as a freelancer, the excitement associated with gradually growing a base of clients and contracts can have you riding a natural productivity high. It’s easy to overcommit, overextend, and give all your energy to projects that don’t pay well. These trials are all a part of the learning curve. However, when it comes to money, you don’t want to box yourself into a job that requires a tremendous amount of energy, only to find that the payoff is well below what is needed to sustain yourself.

The power to set your own freelancer rates for your work is within your grasp. With the knowledge, research, and skills to perform, you can confidently set fair freelancer rates that keep you and your clients happy. Here are seven quick tips to help you set your freelancer rates.

1. Do Your Research

As a freelancer, it’s up to you to stay informed about market fluctuations both in your industry and beyond. The best tool you have to advocate for a reasonable wage is to understand what others are paying for similar services.

You don’t want to price yourself out of prime opportunities or accept below market pay for your work, because it becomes more difficult to raise your prices later. Start by identifying the unique services you provide.

Freelancer surveys can provide you with an idea of current rates across industries. Also, take a look at what employers are paying salaried workers to provide these same services. You can find a plethora of salary information on sites like Glassdoor and Salary.com. Once you have an idea of the in-house costs, consider additional expenses required as a freelance worker.

Browse the websites of industry contemporaries to review their previous projects, clients, and rates. This will help you gauge how you stack up against others charging similar freelancer rates.

If you find that you charge more or less than a competitor offering similar services, it may be time to evaluate your rates.

However, knowing what individual perks you bring to the table will aid you in deciding if you need to make some adjustments, or if you need to better market your own services.

Taxes

As a contracted 1099 worker, you are responsible for paying your own taxes. This means that your rates must take into account the 20% usually deducted per year for salaried employees. This percentage should be factored into your rate. It is vital that you understand your rights and responsibilities when it comes to taxation, as well as much you need to make in order to have to file income taxes.

Home Office

Consider that you must foot the bill for your home office expenses such as internet, printing, software subscriptions, and office equipment. These expenses could be tax deductible, however, so keep excellent records and make a budget sheet to see if your monthly or yearly expenses outweigh your profits.

Marketing

To get clients, they have to be able to find you. Marketing is a necessity for all freelancers and requires a website and a strong social media presence—possibly including ad buys—that require monthly and yearly funds. As you plan your freelancer rates, be sure to factor these costs into your budget.

Insurance

Everyone needs health insurance, and freelancers are no exception. As a nonemployee you don’t have access to an employer plan, so you must figure this vital expense into your wages. Particularly if your industry is high risk, is prone to burnout, or requires extensive physical or mental labor, you want to be sure you can afford healthcare to stay well enough to continue working and earning as a freelancer.

2. Join The Club

It’s a great idea to get involved in an online freelancer community in your field. There, you can ask questions and get a sense of what others are charging for similar projects.

LinkedIn is a great place to start the search for a professional freelancer group or forum. Start with the Virtual Vocations LinkedIn page for daily telecommuting tips and resources.

3. Remember Experience Matters

The level of professional experience you have within your field is one of the most important factors for determining your freelancer rates.

If you are just starting out, you must build a portfolio and recommendations for the quality of your work. This does not mean you should always work for free, but it does mean that you must be realistic about what you can earn based on your skill level.

For example, a freelance graphic designer with one year of experience will look to establish a portfolio with at least three to five substantial projects illustrating skill and originality. Getting here could mean accepting less per hour or per piece of work than an established designer.

In determining your freelancer rates, consider how long it will take you to complete the task. What is the level of difficulty? Does the job require you to do substantial research or editing? How many drafts are you willing to go back and forth on with the client? All these factors can help you establish a fair rate as a beginner.

As you gain more experience, after your first three to five years of work, you’ll need to revise your rates to match your level of expertise. More experienced freelancers in most fields prefer to charge per project instead of per hour, yet it will be up to you to determine what works best.

Factors that can help you decide the best options for your business include the following:

• Time constraints established by either you or your client
• Whether or not editing requests are a frequent part of your field
• The amount of consulting or prep work needed before taking on a project
• The length of your relationship with the client

4. Know that Time is Money

Much of the weight of the decision on whether to charge by the hour or by the project depends on how much time you have to dedicate to freelancing. If you have another job or a hard deadline set by the client, this will impact your rate. You can charge more for quick turnaround projects, as this will require you to devote more time and energy to a project over a shorter period of time.

You can also use time management software to track exactly how much time you spend on each project. This is more helpful if you decide to charge by the hour. You can simply extract the number of hours you worked on a project and create an invoice right away.

5. Weigh Consistency vs. Variety

Once you have a few loyal clients, it’s easy to start to feel comfortable. You want to keep your clients happy as they continue to bring you consistent projects. If you’ve been with a client for two or more years, your skill level has most likely grown.

Although it can a nerve-racking process, raising your freelancer rates with an existing client is a necessary and acceptable practice when your earning goals and expertise expand.

Be prepared to lose a client or two. Unfortunately, businesses also get comfortable with their freelancers and don’t always have the budget to expand freelancer rates, or don’t want to pay more for projects. To make your case for a rate increase, keep your portfolio and list of credentials and awards up-to-date.

Looking for more diverse projects will also push your boundaries and keep you committed to getting stronger in your craft. It’s also an amazing way to help your portfolio shine.

Some freelancers want to maintain long-term relationships with clients, where others prefer to only accept short-term projects without lengthy commitments. Either style is acceptable as long as you can feel comfortable adjusting your rates when the time is right.

6. Consider Your Certifications

Possessing professional certifications unique to your industry and desirable by clients can help you boost your freelancer rates. You will have to be able to articulate how this particular training or certification benefits your client, but if do so, particularly if it is one that is rare or difficult to obtain, you can figure this professional achievement into your rate.

When crafting your marketing materials, ensure any professional certifications or licenses you’ve obtained are prominently mentioned. This will help you more easily attract clients who find value in and will reward your education and experience.

7. Upgrade Your Brand

Now that you’ve established your freelancer rates, you may wonder how to increase your value and earn more. As your experience grows so will your confidence in boosting your wages.

To start working towards a higher rate of pay today, invest in yourself. As a freelancer, you are essentially your own boss. As with any business, the more you put in, the more you get out. Online training, seminars, and continuing education will help you broaden your professional scope.

Expand Your Horizons

Explore a variety of project types to find your strengths. You can use your unique talents to create a brand that stands above the crowd. There is value in both variety and specificity. This means that you should target three or four areas where you really shine within your vertical. Enhance your knowledge in these particular areas and market yourself accordingly.

Website

Upgrade your website to a self-hosted domain to have greater control over your brand. Your website address should reflect a professional name — preferably your own. If you have a common name, think of adding a keyword that will appeal to your audience such as “Jane Doe Photography” or “John Doe Web Design.”

Increase your SEO by utilizing effective tags. Engaging images and a polished About Me page will help potential clients find you. Additionally, ensure your contact information is easily accessible on your website.

Client Feedback

Recommendations are a great way to get more clients. Add a few quotes from happy clients to your website to give it an extra boost of credibility. LinkedIn also allows recommendations and endorsements. Utilize your social media accounts to grow your business and increase earnings.

Moving Ahead

Freelancing is a vivid and dynamic way to make a living as a remote professional. Whether you are a full-time independent contractor or dabbling in a freelance job to earn extra income, the more time and effort you put forth, the greater the reward. Many people make a comfortable living freelancing and with perseverance so can you!

What are your best tips for setting freelancing rates? Connect with Virtual Vocations on Facebook, Twitter, LinkedIn, Instagram, and YouTube to share your thoughts and tips. We’d love to hear from you!