One of the most difficult aspects of freelancing is trying to put a dollar amount on what you're worth. Here are some thoughts on setting freelance rates.
Note: This was one of my earliest posts on this site. I've had a few people recently ask questions, so I've decided to dust it off, update it, and republish. I hope it helps you!
Setting freelance rates is probably one of the most frustrating tasks associated with providing your for-hire services. Whether you offer 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're paid a certain amount. Where things get sticky, though, is when you and the client have to agree on what constitutes a “work hour.”
Setting an hourly rate can also help you draw a clear line based on your expertise. As a beginner, you might charge between $15 and $20 an hour, depending on the services. However, as you become more experienced and build your portfolio, you might be able to bill $100 hour an hour — or more.
Problems with Setting Freelance Rates by the Hour
Think about it: If you work a salaried or hourly job in a more traditional, on-site setting, you're 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?
There are software programs that track this information and then help you invoice clients later, making the process easier.
If you do decide to charge by the hour, you 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. And writers can't even begin to think about charging that much.
Sure, if you quote someone $300 for an article and it takes you two hours to write it, you've made $150 per hour. But the client doesn't think like that. They get what they paid for — an article that costs $300. It doesn't matter how long it took you.
Personally, I Hate Setting Rates by the Hour
My biggest problem with setting freelance rates by the hour is the fact that it's much harder to get paid more. If you perform the work quickly and competently, you're not going to get paid more. In fact, working quicker amounts to a penalty.
I'd much rather charge on a per-project basis. If I get done sooner, it's like getting an automatic raise — at least when I break it down to an hourly rate. While I might evaluate whether a project is worth my time in terms of hours, the price I quote my client is per-article or per-project.
Charging on a Per-Project Basis
For me, it's easier to set a base freelancing rate for each post, for developing web content, and for completing a project.
It's not all sunshine and rainbows when setting freelance rates this way, though. 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're 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 (or the article). 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.
Freelance Writers — Charging by the Word
Freelance writers often look at rates on a per-word basis as well. However, very few of my clients are looking for a set per-word quote (although there are some out there). Here are some issues to consider when charging by the word:
- Clients might restrict your word count: In order to keep you from overrunning the budget, you might be restricted — and have a hard time doing the subject justice.
- It's tempting to write fluff: We're all professionals. But the temptation is still there.
- You might be paid based on the final word count: Perhaps you wrote a 1,200-word article. But after edits, the article is only 1,050 words. You might not be paid for the words you turned in, and instead compensated for the final word count.
When negotiating a per-word rate, be aware of the issues, and address them with the client — and get your agreement in writing.
At the low end, you might accept 10 to 15 cents per word. But those are very low rates. They might be worth it if you're fast, and can whip out an article in a short amount of time. For the most part, though, you want to get a little more for your effort.
However, as you write different types of articles and gain more experience, you could be paid more than $1 per word.
Most of my clients pay what works out to be between 35 and 70 cents per word. It's the wild west out there, so talk to other freelancers to see what they're being paid.
Freelance Editors — Charging by the Page
Similar to freelance writers, editors have their own version of per-project issues. It's very common to set freelance editing rates on a per-page basis. In general, a manuscript page is considered to be 250 words. So you can look at a 50,000-word document and estimate that you'll be editing what amounts to 200 pages.
Carefully think about what makes sense for you. Considerations when editing include:
- Type of work you're doing (line editing, copy editing, content editing)
- How complex the subject matter is
- Your expertise and experience
- Other services you're offering, like formatting
While you might expect to get paid right around $6 a page, it's possible that you warrant being paid $10 or more per page.
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.
How I Decide if a Project is Worth My Time
When evaluating my own rates, I sometimes think about how my article translates on a per-word basis. My rate might start at $500 for an article of 1,000 to 1,200 words. If I get it done in 1,000 words, that's 50 cents a word. If I hit the 1,200 marks, it's about 42 cents per word.
But that small wobble between 42 and 50 cents per word isn't what matters to me. Instead, I translate my projects to an hourly rate. I know exactly how much I want to be paid in hourly terms to make something worth my time.
Even if I'm getting paid 60 cents per word, if something takes up enough time that it dips below my minimum hourly preference, I'll not accept a similar assignment next time. So, even though I don't quote hourly rates, I do use hours spent as a measure of what's a worthwhile endeavor.
Over time, you get a feel for the types of articles that take you a long time, and it's easier to set freelance rates that work for you. Figure out what you're comfortable with, and what keeps you happy and fed and reaching your goals.