Pricing freelance work is uncomfortable, especially when you are new. You do not know what the market rate is. You are not sure what you are worth. You do not want to lose potential clients by charging too much. The result, almost universally, is underpricing. And underpricing creates its own problems: low-value clients, too much work for too little money, and a rate that becomes hard to raise later.
Starting with a structured approach to pricing, even an imperfect one, produces better outcomes than starting from anxiety.
Work backwards from what you need to earn
The most grounded starting point for a freelance rate is your own financial requirements. Start with the annual income you need after tax. Add a percentage for the costs of being self-employed: National Insurance, any software or equipment, professional development, periods without work. As a rough rule, freelancers need to earn around 30 to 40 percent more than an equivalent employee to account for these additional costs.
Then think about how many billable hours you can realistically work in a year. Not total hours, billable hours. Administration, finding clients, invoicing, professional development and downtime between projects all eat into the total. A common estimate for solo freelancers is around 1,000 to 1,200 billable hours per year. Divide your required income by that number and you have a baseline hourly rate.
Check what others charge for similar work
Your baseline rate tells you what you need. Market research tells you what is achievable. Look at job listings for equivalent freelance roles, search freelance platforms for similar services, and talk to other freelancers in your field if you can. You are looking for a realistic range, not a single figure. Your rate needs to sit somewhere in that range given your experience level.
Consider day rates as well as hourly rates
Many freelancers work on project rates or day rates rather than hourly rates. This is often better for both parties: the client knows what they are paying, and you are not penalised for working efficiently. A standard approach is to take your hourly rate and multiply by seven to eight for a day rate. When quoting for a project, estimate the hours carefully and build in a contingency of around 20 percent for scope creep and revisions.
Raise your rates as you gain experience
Your starting rate is not your permanent rate. Every new piece of work adds to your portfolio and your confidence. Review your rates every six months in the first year and annually after that. Existing clients may push back on increases, which is normal and worth managing, but new clients should always be quoted at your current rate, not the one you charged a year ago.
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Ask Fin provides general guidance only. Freelance income must be declared to HMRC via Self Assessment.