Invoice generator › How much to charge

How much should you charge as a freelancer?

There are only three ways to arrive at a rate. Most people use the weakest one and stay there for years.

Method 1 — from your costs (the floor)

Work out what you need to earn, divide by the hours you can actually bill, and you have a number below which the work is not worth doing. That is what the calculator above does.

Its strength is that it is defensible and it stops you accepting bad work. Its weakness is that it has nothing to do with what the client gets. A cost-based rate rises only when your costs rise, which is a strange thing to build a business on.

Everybody should know this number. Nobody should stop here.

Method 2 — from the market (the reference)

What do comparable freelancers charge? Sources that are actually useful:

• Rates quoted openly in communities of your own discipline — designers, developers, copywriters all have places where numbers get discussed
• Recruiters and agencies, who will tell you day rates for contract roles
• Job listings for contract positions, which often state a range
• Asking three people you trust in the same field, directly. It is less awkward than you expect and more accurate than any survey

Two cautions. Public rate surveys skew low, because the people who answer them are not the people charging the most. And a market rate tells you what the average is, which is not where you want to be positioned.

Method 3 — from the value (the ceiling)

What is the work worth to the client? A landing page that lifts conversion by two points for a business doing ten million in revenue is worth vastly more than the three days it took. Cost-based pricing cannot see that; value-based pricing is the only way to charge for it.

To price this way you need one thing: to know what the outcome is worth. Which means asking, before you quote:

• "What happens if this works? What is it worth to you?"
• "What is this costing you now, in money or in time?"
• "What have you tried, and what did that cost?"

Most freelancers never ask, quote from their day rate, and leave the difference on the table. The client's answers also tell you whether the project is serious at all.

Value pricing works best on fixed-price projects with a defined outcome. It works badly on ongoing retainers and on work whose value the client cannot quantify — there, a day rate is more honest.

How the three fit together

Cost-based rate   -> your floor. Never go below.
Market rate       -> your reference. Tells you where average is.
Value-based price -> your ceiling. Where the money is.

A worked example. Your floor is 480 a day. The market for your discipline is 500–700. The project is a rebrand for a company launching a product they expect to make two million from. Quoting 15 days at 550 gives 8,250 — defensible, average, and far below what the outcome is worth. Quoting the project at 18,000 is a different conversation, and it is available only if you asked what the launch is worth.

The four signs you are charging too little

1. Nobody ever pushes back on price. A healthy quote loses some work. If you win everything, your price is under the market.
2. You are busy and not making money. The clearest possible signal: the problem is the rate, not the workload.
3. Your clients are difficult. Cheap prices attract clients who treat the work as cheap. This correlation is stronger than anyone expects.
4. You cannot take a week off. If a week without invoicing is a problem, the rate has no buffer in it.

Where to start if you have never had a rate

Run the calculator, take the floor, add 20%, and quote that with a straight face. It will feel too high — that feeling is not information. Then raise it on the next new client, and again on the one after, until someone says no. That is how you find the market, and it costs one lost project to learn what a year of guessing cannot tell you.

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