How Much Should I Charge as a Freelancer?

Updated 2026-08-31 · ProfitKit

Start from the income you need, not from what other people charge. The rate you must charge is your target take-home income, grossed up for tax, plus business expenses, divided by the hours you can genuinely bill — which is far fewer than the hours you work.

The mistake that halves your income

Nearly every new freelancer divides their target income by 40 hours × 52 weeks. Both numbers are wrong in the same direction:

• You cannot bill 40 hours. Proposals, invoicing, chasing payment, admin, learning and marketing are unpaid. 25 billable hours in a 40-hour week is realistic; 15–20 is normal while you are still building a client base.
• You cannot work 52 weeks. Holidays, illness and gaps between projects exist. 46 weeks is an honest planning figure.

Those two corrections alone change 2,080 assumed hours into 1,150 real ones — the rate you need is nearly double the naive calculation.

Then add the tax you forgot

Employees see net pay. Freelancers invoice gross and owe tax later, so the target must be grossed up: to take home $30,000 at a 20% effective rate you must earn $37,500. Add $3,000 of software, hardware and fees and you need to invoice $40,500 — which over 1,150 billable hours is a floor of about $35 an hour.

That figure is a floor, not a price

It contains no profit, no savings, no equipment fund, no buffer for a slow quarter. Your actual rate should sit clearly above it. And the floor is the number that tells you when to say no: a project below it is not a small win, it is subsidised by you.

Hourly, day rate or fixed fee

Clients often prefer fixed fees, and fixed fees can pay better — but only if you know your hourly floor first. Estimate the hours honestly, add about 30% for revisions and scope creep, multiply by your rate. If the result exceeds the client's budget, the honest options are reducing scope or declining, not absorbing the gap.

Raising your rate

Raise it on new clients first, where there is no history to renegotiate. Existing clients are easier to move at a natural boundary — a new project, a new year, a changed scope — with notice rather than apology. A rate that has not moved in two years has effectively fallen, because your costs did not stay still.

Do the calculation