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Confessions of a Professional Blogger

Setting Freelance Rates: Hourly or Per-Project?

One of the most difficult aspects of freelancing is trying to put a dollar amount on what you’re worth.

Deciding how much you will charge for your freelancing services is probably one of the most frustrating tasks associated with freelancing of any kind. Whether you are offering your services as a staff writer, designing logos, or coding software, you need to put a price on how much your services are “worth.”

There are two main models of setting freelance rates: Hourly and per-project. What you choose depends on your own situation, as well as what your clients are used to paying.

Charging By the Hour

One of the biggest advantages to charging by the hour is that you are paid a regular “wage” for the work you do. You work a certain number of hours, you are paid a certain amount. Where things get sticky, though, is when you and the client have to agree on what constitutes a “work hour.”

Think about it: If you work a salaried or hourly job in a more traditional, on-site setting, you are paid for the amount of time you are at work. It’s pretty straightforward. When you are billing hours as a freelancer, though, things are a little fuzzier. Do you count your brief lunch break? What about the small talk you engage in before you get down to brass tacks with someone? And, is there a way to honestly ensure that you aren’t surfing the web when you should be working on a freelance project for a client?

If you do decide to charge by the hour, you will need to consider what seems a reasonable hourly rate. One of the downsides to charging hourly is that a client may balk at a high hourly rate. Yes, it’s common for a freelance graphic designer to be paid between $75 and $150 an hour. But when you tell a client that rate, it seems awfully high. Psychologically, it is often easier for a client to pay that rate if you quote a price for a completed project.

And, you will need to keep track of the hours you work so that you can bill for your time. There are software programs that track this information and then help you invoice clients later, making the process easier.

Charging on a Per-Project Basis

Personally, I prefer to charge on a per-project basis. It’s easier to set a base freelancing rate for each post, for developing web content, and for completing a project. The main downside to this method of setting freelancing rates is that you have to be able to accurately estimate how much time it will take you to do something, and then translate it into a quote for the finished project. If you’re wrong, and it takes you longer than expected to complete the project, you are out of luck.

Another issue, especially if you are working with someone long term, is that of raised rates. If you decide to raise your rates, it can be difficult to explain the situation. You might need to change the way you accept freelance jobs, or quit working with clients who won’t pay your higher rates.

The upside to charging on a per-project basis, though, is that you are paid for the project. You don’t have to worry about what constitutes a “work hour.” Instead, you are paid for what you actually do. I like this, since it is fairly cut and dry. I don’t have to worry about which client I should be billing for which hours, and it’s easy to switch back and forth between projects without worrying about whether or not I’m keeping track of how many minutes or hours have been spent.

What Works Best for You?

Weigh your options, and decide which method of setting freelance rates works best for your situation. For many freelance projects (especially writing projects), it is fairly easy to have a set price for certain types of work. In some cases, though, if it’s a large project that could take months, and require research, it might be a good idea to charge on an hourly basis, to make sure you are compensated for your time. You can also create a hybrid method of charging, setting a base price and then letting the client know that you will charge a specific hourly rate for research or interviewing.

12 Responses to Setting Freelance Rates: Hourly or Per-Project?

  1. Echo says:

    I prefer charging on a per-project basis whether I’m doing the freelance work or paying for it. It’s less ambiguous that way, and everyone knows up-front what the total cost will come to.

    It also depends on the client and the type of project. Media companies can pay a lot more than most bloggers can afford.

    • Miranda Marquit says:

      I have a base rate that I charge for certain types of work, but I try to be flexible, based on the client. Like you said, many PF bloggers can’t afford to pay the same rate that bigger companies can.

  2. Geoff says:

    Hey Miranda, one of the struggles of freelancers that many full timers don’t understand is that rates need to be higher to make up for all the work you do that is not tied to an hourly rate (like accounting and marketing for the next gig).

    Most freelancers (other than you :)) don’t always know when the next job is coming and have to add in a little extra margin to support the risk and potential down time between jobs. A very hard concept for people to understand that have never been in that position.

    BTW- thanks for the link!

    • Miranda Marquit says:

      Good point, Geoff. Many people don’t realize that it does, even for freelances, take some money to make money. There is some outlay, and if you don’t know where the next gig is coming from, there could be some real financial trouble. Higher rates are a part of that. Of course, even with the higher rates, a freelancer can often cost less than paying a full-time person to do the same job, since with a full-timer you are paying for benefits, and the overhead associated with the workspace. So, really, when that is factored in, it can be a win-win.

  3. Freelancing says:

    Per project for sure. Hourly rates equates cans of worms in too many cases. That said, it may work but after you’ve established a solid freelance track record. This may just work for you especially when you have enough experience to know how long the project will take to complete.

  4. nresmn says:

    I am just entering into a business deal that would require me to input data to be used as a catalog. I am not sure what a fare hourly rate would be, I am totally new to this type of work and don’t want to over or under charge. Do you have any advice.
    Sincerely

    • Miranda Marquit says:

      I’m not sure about data entry. You might want to consider where you live, and the going rate there. You can use a site like PayScale.com to check average hourly rates for data entry to get a basic idea of what you should charge.

  5. eemusings says:

    I’ve definitely come to realise that per project is where the real money and potential lies. It also is a good incentive to work more efficiently…

    • Miranda Marquit says:

      For sure! I was staggered the other day when I figured my hourly rate. If you can work efficiently at a per-project rate, your hourly rate skyrockets.

  6. Tracy says:

    I have been offered an opportunity to reformat booklets and materials for a company. I won’t be re-writing their content, so much as I will be formatting their content into a more cohesive look so that all their materials have a uniform and professional appearance. There will be some editing to remove typos and errors.

    I have experience doing this type of work as part of a previous position I held, but I have never done this freelance. I am struggling to decide on a quote for them. I want a fair compensation, but I don’t want to price myself out of this opportunity either.

    Do you have any suggestions?

    Thanks!

    • Miranda Marquit says:

      That’s always a tough line to walk. You don’t want to scare away a client, but you also don’t want to sell yourself short. One thing you can do is start with your hourly pay at your previous position. Since you’ve done this work before, you should be able to gauge approximately how long it will take, and then you can quote based on that. So, if you think the project will take 10 hours, and you are used to earning $15/hour at your previous job, you could charge $150. Or, if you want to build in a buffer, you could charge $200. Another tack is to consider this as a graphic design job. If that is the case, you might be able to charge $70/hour, which would mean a quote of $700. If you think that $200 is too low, and $700 to high, now you have a range. In the end, you need to decide how much you think your time is worth, and how long it will take to complete the project. I’ve also, to signal to the potential client that I’m willing to negotiate, occasionally given my quote and then added, “Does that seem reasonable?” This invites a counter-offer if the client thinks you are asking too much. Then, you can decide if the counter-offer is too low. This is one way to see if you can get a little more while still not pricing yourself out of the opportunity.

      • Tracy says:

        Thanks for the quick reply and suggestions. I gave them a couple of different scenarios with options…a price range for an hourly rate and a price range for a per page rate. I explained that since I am not a “professional” in this, but have a knack for it and some experience, that I would take a pay in the lower range as that seemed fair. In the end, they were extremely generous and we decided to barter some time to help each other. We negotiated one booklet to begin with and will re-negotiate going forward after this one is complete.
        Thanks for your blog! It proved most helpful to me!!

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