Setting the right price for your freelance projects can be tricky, especially when you’re just starting out. Charging too little can leave you struggling to make a sustainable income, while charging too much without justification may drive potential clients away. The best approach? Base your pricing on a well-calculated hourly rate and refine your process over time. In this guide, we’ll walk you through a simple method to determine your project pricing effectively.
1. Establish Your Hourly Rate
Before you can price projects, you need to set an hourly rate that makes sense for your financial needs, experience, and market conditions. Consider the following factors:
- Your living costs and financial goals – Make sure your rate covers your expenses and allows for savings.
- Industry standards – Research what other freelancers in your niche and region charge.
- Your skill level and experience – Higher expertise justifies higher rates.
- Your desired profit margin – Think beyond covering costs; aim for growth.
Once you determine a base hourly rate, keep it in mind when pricing projects.
2. Estimate the Project Time
The next step is to estimate how long the project will take you. Break it down into:
- Planning & communication – Calls, emails, and gathering requirements.
- Development or design work – The core of the project.
- Revisions & bug fixes – Clients often request changes.
- Deployment & finalization – Delivering the finished project.
Multiply your estimated hours by your hourly rate to get a base project price.
3. Add a Buffer for Unexpected Work
Projects rarely go exactly as planned. Bugs, revisions, and unforeseen issues can eat into your time. To protect yourself, add a 20% buffer to your estimate. This ensures that even if you run into unexpected delays, you’re still compensated fairly.
4. Factor in Profit and Taxes
A common mistake freelancers make is only charging for their labor. But businesses don’t just cover costs—they make a profit. Even if you’re working solo, it’s good practice to add a profit margin on top of your base rate. This is extra money that helps your business grow.
If you’re responsible for paying taxes, include those in your pricing too, so you’re not left with surprises later.
5. Learn from Experience and Improve
Your first few projects might not be priced perfectly, and that’s okay. Keep track of how much time you actually spend on each project versus your estimates. Over time, you’ll refine your ability to estimate accurately, allowing you to price more confidently.
As you gain experience and streamline your workflow, you’ll be able to complete projects faster while maintaining the same (or even higher) pricing. This is how freelancers increase their earnings without working more hours.
6. Track Your Time and Profitability
Tracking your time and project profitability is essential for growth. That’s why I built Paytick, an app designed to help freelancers like you keep track of your hourly rate, project costs, and earnings. It’s free to try—check it out at https://paytick.app!