When I first started out as a freelance writer I really struggled to work out what I should charge when faced with a specific brief from a client. Hell, I even struggled to work out what to charge for a single article.
That was almost ten years ago and I’ve learned so much since then. I wanted to create a guide to help all freelancers price their services no matter what scenario they’re faced with.
Whether you’re a writer, graphic designer, marketing professional or do some other kind of freelance work, this article will help you.
I use real examples throughout but because my experience is in marketing and writing, most will fit into those categories. That being said, you’ll be able to apply this to your career no matter what you do.
Work out your day rate
There are two ways to do this. You can work from similar full-time salaries in your area, or you can think about the life you’d love to lead. You’ll probably use a combination of both of these during your career. They are detailed below.
Work out your rate from your desired salary
If you had a full-time job doing what you do as a freelancer, what kind of annual salary would you require? If you have no idea, take a look at the salary of comparative jobs in your area (Glassdoor is a good resource here). You might need to expand that search to your nearest city, or maybe the capital, depending on where you live.
Let’s say you find a job that pays the equivalent of $50,000 per year and that sounds about right for the level you’re at. From there, you need to convert this into your day rate. There are plenty of calculators out there will do this for you but the basic calculation is salary divided by the number of days worked to find your day rate.
There might be 365 days in a year but you probably won’t want to work them all. There are around 250 working days in a year.
So, for this example, divide 50,000 by 250. That makes your day rate $200. Of course, you don’t get all the perks of a full-time job when you’re freelancing so you’ll need to add to that to cover expenses, health care, sick days, vacation time etc.
Most people will tell you to add 20% but that’s often not enough. I’d play it safe and add 50%. This brings your day rate to $300.
Now, you might not want to work all 250 working days in the year, you might want some time to travel and take extra vacation time. Just reduce that number to one that suits your lifestyle.
From there, take your day rate and divide it by the number of hours you work in a day (usually seven or eight).
300/8=37.5. I would normally round this up so clients can get a little discount if they book you for a full day.
In this case, your hourly rate would be $40.
Do some lifestyle design to work out your day rate
This is one of my favourite things to do with the business people I coach. It’s all about looking at the life you’d like to live and working out your rate from that.
I learned this from Tim Ferriss who talks about it in the 4-Hour Work Week (which I highly recommend, by the way).
When he talks about lifestyle design and costing it, he says: “ If you’re five years old and say you want to be an astronaut, your parents tell you that you can be anything you want to be. […] If you pass 25 and announce you want to float in space or sail around the world, the response is different: be realistic, become a lawyer or an accountant or a doctor, have babies, and raise them to repeat the cycle.”
Why should we settle? Why shouldn’t we aim high?
Here’s his detailed explanation of how it all works but I’ve provided an example below.
The dreamlife numbers
First look at the expenses of your current ideal life. Rent, bills, business costs, all the training you’d love to take, clothing, nights out with friends. It doesn’t matter if you currently can’t afford to do all that stuff.
It might look like this:
- Lease on a new car — $300
- Rent — $1000
- Business expenses — $500
- Training — $200 (if you see yourself only taking two big training courses each year, just break this down over 12 months).
- Books — $50
- Socialising — $300
- Clothing — $500
- Travel — $500
There are about 20 working days in a month.
Rounded up, that makes your day rate $170.
That’s what you need to earn to live very comfortably. Include savings, hobbies, gifts for loved ones and so on in this list to work out the day rate for your life.
Then think about your dream life. What car would you like to be driving in 12 months? Would you have a bigger house? Are you saving for a big trip?
Add these to the calculation:
- Down payment on a house- $2000 (assuming a deposit of $24k)
- New car — $2500 ($30k to buy when new)
- Dream vacation — $500 ($6k for the full trip)
Add these into your equation.
$8350/20(working days) = $417.
There you have it, a day rate that will have you living your dream lifestyle in a year.
$400 or so is a normal day rate for a good freelancer. But if you can earn that every day, it’ll have you living a really comfortable life with a new car, big travel plans, and a down payment on a house — if that’s what you desire.
Work this out for your dream life and evaluate from there. If you come out with a day rate that seems crazy at this stage in your life then extend the plan. Save for that car over two years, or plan for a smaller trip over the next 12 months.
When I first did this, I realised I needed to earn £100 ($130) per day. The peace of mind that gave me when I was hustling was immense and I’ve now set myself a day rate that means I don’t have to work every day.
Consider how much time the project will take
Once you have your day rate, you can start to think about the project that’s been put in front of you. (Or the one you’re pitching to a client.)
Think about it logically, if you were to sit down and do the work, how long would it take you?
Think broadly here. As a writer, think about the time taken to properly understand the brief, do your research, speak to experts and make changes afterwards.
If you’re a designer, think about the time it’ll take to understand the brand, ask questions, do the work and provide revisions.
Work out how long all the work will take you and quote from there. Maybe add 10% or an hour or two on top to protect yourself from any unforeseen delays or issues.
So, you’ve worked out your day rate is $400 with an hourly rate of $50. The work will likely take you three hours so you decide to charge $200 (four hours) just to be safe.
Bear in mind, your hourly or day rate isn’t the only way you can price your work.
As you become more experienced, you’ll get quicker and you’ll learn to ask all the right questions that will speed up the process. That means, your rate for the same work will actually go down.
Once upon a time, it would’ve taken me days to complete a complex article. Now, I can complete something like that in a day, maybe half if it’s one of my specialisms.
Try not to reduce your rate, even if you are working quicker. Either stick with original estimates or up your hourly rate.
It makes no sense that a quick writer should only get paid $100 for the same work as a slower writer who was able to charge $200.
Charging by the word
This is where charging by the word or project comes into play. As a writer, I used to set myself a rate per 500 words. I started out at £25 ($33) for 500 words and this soon rose to £45 ($59), then £100 ($130). I don’t charge like this any more but it worked well for me for a long time.
Note: These aren’t great rates. But they worked for me 10–15 years ago when I was writing as a side hustle.
Those numbers were still grounded in my hourly rate assuming it’d take me 1–2 hours to complete a piece.
It made calculating full website rewrites of 5000 words really easy in those early days of my career.
As you evolve, you’ll begin to see that you can provide so much more value beyond the words you put on a page. Now, if I were asked to write 5000 words, I’d include a branding session, deep competitor research and other add-ons that justify my costs.
Think about the value to the client
Understanding why a client wants you to complete a piece of work can also help you price it. If you’re writing high-converting sales copy for a high-priced product, and you have the credentials in this area, the client will be willing to pay more.
Let’s say you know their product costs $1000. It’s worth asking the questions about projected sales, conversion rates and other key performance indicators. This will give you a sense of how much your copy might help them sell.
You may also know the conversation rates your previous sales pages have hit, so all you need is their audience size to work out how much money they could make.
Let’s assume they’re expecting 10 sales from their first push of people to your sales page.
That’s worth $10,000.
It suddenly doesn’t make sense to charge $200 for this piece of work. But $2,000 sounds closer, right? Maybe more, depending on your experience.
But let’s assume their audience is 100,000 and you know your previous work converts at 6%. That’s 6,000 people who might buy. That’s an income of $60,000 on one sales page.
That business is going to work damn hard to make that happen and you, as the expert here, have the right to charge what that page is worth.
Adding extra value
Let’s say you don’t want to charge $8,000-$10,000 for a single sales page but you can see how the work you provide would be worth that.
Think about what you can do that will help the business absolutely smash its goal.
What if you were to hold a branding session ahead of the writing to get a real sense of the problems the product solves? What if you were to write an email marketing sequence to complement the sales page? What if you could offer social posts alongside it? What if you created two blog posts that could link to the sales page?
As you become more experienced, you’ll be able to see avenues for extra work with each client.
Remember, it’s fine to just tell a client how much something will cost. You might have to justify that based on their return on investment but a business owner won’t care how long the work actually takes you if it’s going to get results.
What do you want for this work?
As you become more experienced, you’ll understand what your work is worth to a client using the methods above.
But sometimes, clients can’t afford those high rates, even if the ROI would be great for them.
If you don’t think they’ll go for the $10k package that makes sense to you — or they ask you to negotiate — think about what you want for the work.
I’ve done this. I’ve had some trips away in uninspiring places where I couldn’t get much other work done. I charge more for those projects than similar ones where I have downtime to explore a new place.
Your understanding of your work and how much you need to be paid will deepen as you gain more experience. In part, money is a mindset. Don’t forget that because it’s important here for your confidence.
If I have to travel for a job, I’ll often charge for my time spent travelling and staying over somewhere. I love this part of my job but it does limit what I can get done for other clients. This is a loss of earnings for me, even if I am enjoying the experience of travel.
For example, I ran a workshop in Portugal for a race series (motorsport is part of my niche, I’ll come onto this). Part of the deal was that I would hang out during the race weekend and experience the on-track action after my workshop. This was great, a real perk of the job. But it meant I was unable to work during those days so I had to charge accordingly.
Other things to consider when pricing your services as a freelancer
Once you know what to charge, you’ll be on the right track but there are some other things to consider.
Charge what you’re worth
It’s so tempting to price yourself low and undercut the market. Firstly, this is not good for the industry as a whole and writers who do this tell big businesses that it’s OK to pay terrible rates.
Even if you slowly increase your rates with your experience, always charge what you’re worth.
Note: I understand what it’s like when you’ve got bills to pay and you’re desperate. So even if you’re forced to take low-paying work, try and implement some of this advice with other clients so you can ditch the bad payers ASAP!
When you pitch, you need to show the value in your work. What impact will your article/design/website/campaign have on the business? How will it help them achieve their goals?
Talking about the results of previous work is a great place to start but you can also paint a picture of intended results too.
Don’t work for free
There are only a few reasons why any freelancer would ever work for free. Sometimes, you just want to write that story and can’t place it anywhere (although I’d still suggest you persevere). Maybe you have zero experience under your belt and just want a couple of bylines on blogs around the internet.
Even if you’re starting out, there’s no reason to work for free for more than a month. If you want to hone your craft, create your own blog or write on Medium. Both of these give you editorial control and can allow you to make some money while you develop your skills.
This also applies to unpaid writing and editing tests. Don’t do them. It’s a huge red flag and you’ll end up working with a business that pays terribly and doesn’t value your time.
Set some boundaries
There are some clients out there who will take the piss as soon as they get a chance. This usually happens with lower rate jobs but not exclusively.
My boundaries (as a very experienced niche writer) look like this:
- Payment upfront (or partial payment if it’s a big job)
- A kick-off call to make sure we’re on the same page
- Two rounds of revisions included in the price
- Other revisions will be chargeable
- A clear timeline that means clients don’t leave me hanging for months then ask for revisions
I have a strong niche, 15 years experience and plenty of results for my clients. This means I can get away with having such strict boundaries. Newer writers might not be able to do this but it’s still important you set something. Yours might look like this:
- Payment within 14 days of invoice being sent
- Deposit upfront for larger jobs
- A detailed brief
- Two rounds of revisions
Set expectations ahead of time and make sure businesses understand and agree to your terms before the work begins.
How to haggle
Sometimes, a business will tell you how much it wants to pay. This is often a good thing because it takes the pressure off you. But business owners want to get a good deal so there’s usually some wiggle room for you to haggle.
If the rate seems very low: Go in with your standard rate based on all the above info. It’s likely they won’t go for it (although some will!) but you’ve shown a business what you’re worth. If all writers did this, those insulting rates wouldn’t be a thing.
If the rate seems reasonable: If you get offered a reasonable rate that’s lower than your usual rate, you can haggle. Talk about the benefits of working with you and the value your work will bring, then mention your usual rate.
You want the business to be sold on your skills so when it sees that you charge a slightly higher rate, it’ll be a no-brainer.
Become an expert
This has been the thing that has changed my career for the better. At some point, I managed to specialise in the automotive space. I’m known for writing about future tech in the industry, electric cars, and motorsport — as a journalist and as a content writer.
Shouting about this online means work just falls in my lap and I rarely have to pitch. I’ve been paid hundreds of pounds for three-minute segments on national radio, I’ve been approached by car manufacturers to do content marketing, and I ghostwrite thought leadership pieces for industry experts.
All because of my niche. People see me as an expert.
Find your niche or fall into it. But start to position yourself as an expert as this gives you so much power when it comes to finding clients and negotiating with them.
For writers, you might specialise in a certain topic. Designers might specialise in a certain style. Marketers might have a specialist industry. This is a good tactic over generalising because you become the go-to person.
Never stop learning
Understanding the business side of being a freelancer is all good and well but you won’t get great testimonials or ongoing work if your craft isn’t up to scratch. Put yourself on courses, read, try new things, hire a coach. Do things that help you develop as a writer (or designer/developer etc.) as well as the things that help you develop as a business owner.
Due to popular demand, I’ve put together a calculator that will help you with all the equations outlined in this article. You can download it here.
I hope this guide has given you some insight into how to price your work and keep growing your freelance business. If you have any questions, I’d love to answer them. You can find me on Twitter, I’m Jetlbomb.