Enter your desired yearly salary, your weekly estimated hours worked, and the number of weeks worked per year to calculate a proper freelance rate.
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Freelance Rate Formula
The following formula is used to calculate a freelance rate for your services.
R = DS / (H * W) * 1.30
- Where R is your hourly rate ($/hr)
- DS is your desired yearly salary ($)
- H is the average hours worked per week
- W is the number of weeks worked per year
- 1.30 is a 30% factor for expenses
Freelance Rate Definition
What is a freelance rate? A freelance rate is an hourly monetary fee charged to a customer for freelance work performed by someone providing a service. This rate is typically expressed as $/hour of work.
Freelance Rate Example Problem
How to calculate freelance rate?
- First, determine the yearly desired salary.
For this example, we would like our annual income to be $120,000.00.
- Next, determine the number of hours worked per week.
On average it’s found that the freelancer in this problem works 30 hours per workweek.
- Next, determine the number of weeks worked per year.
Accounting for 3 weeks of vacation time, this freelancer works 49 weeks per year.
- Finally, calculate the hourly freelance rate.
Using the formula above, the freelance rate is calculated to be 120000/(49*30) *1.30 = $106.12/hr.
About Freelance Rates
What’s a good freelance rate? A good freelance rate depends on the amount of money you wish to earn, but also the amount other freelancers are charging for similar services. For example, you may want to earn a rate of $100.00/hr, but if someone is offering the same service for less, you may not be able to charge that rate.
How to raise freelance rates? There are two key tactics in negotiating a raise in freelance rates. First, you need to have a completely booked schedule (or as much work as you like to handle.) Then, for any additional work you take on, raise your rates significantly. You will land less new work, but the new work you do land will be higher than other work.
From there, you can start negotiating with current work. For example, you can approach your customers with a friendly email explaining that your work schedule has increased drastically, and you need to either raise prices or cut back on work. Show them that you have other offers for higher rates and let them know that they will need to match those offers in order to keep the service.
Another tactic you can use to increase freelance rates is to offer premium services on top of your current work. You can charge a “premium” rate for these extra services which will bump up your average freelance rate.