April 24, 2023
Most freelancers have thought about, “What is a good hourly freelance rate?” or “What should my freelance hourly rate be?” as well as wondering how they can get clients to pay that freelance hourly rate. Many of us are frequently working on how to set hourly freelance rates when we’re quoting projects for freelance clients.
If you’ve been freelancing for longer than a minute, you now know that freelance rates are all over the place. Setting an hourly rate for freelancers depends on the type of freelance work you’re doing, years of experience, service, industry, client, and they can be different rates even within the same company. (Yes, you’ll probably still find that writing rates for magazines’ print versions are higher than their websites—even though it might involve the same amount of work.)
As a freelancer, you should have a few financial goals in mind before you get started freelancing. Sure, you want to “earn a living freelancing” or “make money freelance writing” but I suggest freelancers, my online freelance writing course students, and freelance coaching clients think big first before establishing their hourly freelance rate.
Get tips on calculating hourly rates for freelancers an your ideal freelance hourly rate.
I suggest coming up with two numbers here. First, the amount you need to earn to live comfortably and pay your taxes on your freelance income. (Remember, taxes could be 20 to 30 percent or so of your gross freelance income so set that money aside monthly and pay quarterly. Get more tax tips for freelancers here.) Using a detailed budget with all of your expenses listed will help inform you about the amount you need to earn as a freelancer to live on.
The second freelance rate should be a goal rate you want to aim for this year. Let’s say my monthly bills are $2,000 a month. In theory, I’d need to earn about $25,000 net annually to pay those and do nothing else. Let’s say I’m setting aside about $8,000 for taxes, so in reality, I’d need to earn about $32,000 to $35,000 in gross freelance wages in order to pay my bills. Again, that means at the end of the year all I did was earn money from freelancing to pay bills and the government. (Not super fun.)
I suggest you should have a freelance goal that’s close to double this amount (or more) in order to have a comfortable living wage as a freelancer. That will allow you to have money set aside for savings, retirement, more freelance expenses and, oh yea, some fun extras as well!
Some freelancers recommend calculating an hourly rate for freelancers by determining the amount of freelance hours you want to work each week. I think that can be wise advice—and it’s another way to look at your freelance hourly rate—but I think it’s crucial to first establish what you need to earn to live your life comfortably before working on the time component. Knowing you have to earn $2,000 a month will help you stay motivated to keep pitching and finding new clients when you aren’t near that goal, and it can help you feel more relaxed when you know an invoice of that amount is coming in early in the month and you don’t have to worry as much.
Get my monthly marketing plan here to learn how to break down your annual goal and the marketing practices you need to work on each week to hit your goals.
Again, I think it’s helpful to know the bare minimum you have to earn each month in order to pay your bills, breathe, and not stalk the postal worker waiting for checks to arrive in the mail. (Or was that just me in my early days of freelancing?)
If you want to earn $100,000 a year and become a six-figure freelancer, you’ll need to adjust your monthly earnings goal in order to calculate your hourly freelance rate. Simply put:
$100,000 / 12 months in a year = $8,333.33 a month
Not a bad freelance salary right?
I try to average earnings between $8,000 and $10,000 a month as a freelancer. If you are running a freelance side hustle and working full-time in another job, your monthly freelance goal might be a lot lower. When I was freelancing on the side, I think my monthly freelance earnings goal was around $1,500 to $2,000 a month.
Now that you have an idea of monthly full-time freelance income goals, it’s important to factor in how many hours you want to work each week, as well as holidays and time off throughout the year. Yes, you should set aside time for holidays because even if you aren’t observing them your clients might be and it could lead to a slow season.
Time for some freelance math! You might be thinking, Ugh! Math! I’m creative, I don’t want to do math!
But, if you don’t know what your financial target is, you won’t be able to hit it. You also won’t be able to calculate whether a freelance assignment or freelance project is worth your time. In order to earn a great living freelancing, you need to do the math to set hourly freelance rates.
Let’s say I want to earn an average of $7,000 to $9,000 a month as a freelancer. Ideally, I’m aiming for $80,000 freelance salary since working part time with two small children.
I also plan that I won’t work for four weeks of time off throughout the year (that includes holidays, single days off, sick days and vacation).
52 Weeks a year – 4 weeks off = 48 weeks of work
I also don’t want to work more than 20 hours a week on average. (And, if I’m being honest, 15 hours or so has been my sweet spot since having two kids. Here’s how to freelance with a baby.)
$80,000 (ideal sample gross income a year) / 48 weeks = $1,666 a week.
I now know I need to earn on average about ~$1,700 a week freelancing in order to hit this freelance salary goal.
I don’t know about you but when I think about setting an hourly rate for freelancers, earning $1,700 a week gross sounds like a lot of money, right?
In order to reach an average freelance salary of $1,700 a week and only work about 18 hours a week, my freelance hourly rate needs to be $95 an hour.
(BTW, my monthly freelance marketing guide will give you the weekly and monthly tasks to follow to find high-paying freelance clients. It’ll also help you calculate a freelance hourly rate.)
Now, what any experienced freelancer knows is that if I’m setting aside 18 hours a week to do freelance work, all of those hours likely aren’t billable. That means you aren’t earning an income for each hour worked or billing a client for every freelance hour.
In general, I’m probably working on freelance assignments or freelance projects that are billable hours 12 hours week.
The rest of the time is spent running my freelance business.
That means I’m spending about six hours each week on unpaid work:
Since I’m only working about 12 billable freelance hours for clients a week, that means my freelance hourly rate needs to be around $142 an hour in order to reach the goal of earning $80,000 a year while taking four weeks off and working less than 20 hours a week.
Overall, I aim for a freelance hourly rate of $150 an hour so it balances out.
I have a higher hourly rate for some clients and a lower one for others.
This is the simple math of how I calculate my hourly freelance rate and make sure I’m working on freelance projects and article assignments that help me earn at least $150 an hour freelancing.
I’ll say “on average” I aim to earn that. I earn less than that for some clients and way more than that for others.
Want to learn more about how to earn $100 an hour freelancing and freelance writing? Enroll in my new self-directed freelance course on Teachable. I’ll explain how you can find higher-paying clients, work more efficiently, ditch lower-paying clients, and earn more money in less time freelancing. Join me!
Tags: freelance rates, freelance writer, freelance writing, freelance writing advice, freelance writing course, freelance writing tips, freelancer, freelancers, freelancing, making six figures freelancing, six figure freelancing, six figure income, six-figure freelancer
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