Freelance Rate

The most common freelance pricing mistake is converting a target salary to an hourly rate by dividing by 2,080. That figure assumes every working hour is billable and that an employer is still covering everything an employer covers. Neither holds.

Start from billable hours, not total hours. Sales calls, proposals, invoicing, bookkeeping, admin, marketing, and professional development are all unpaid and all necessary. A realistic billable fraction is commonly somewhere around half to two-thirds of working time, which alone means the rate must be meaningfully higher than a salary-equivalent conversion suggests.

Then add what an employer used to absorb. Self-employment tax covers both halves of FICA rather than one. Health insurance moves onto you in full. Retirement contributions lose any employer match. Paid holiday and sick leave disappear — time off is now unpaid, so the weeks you do bill must cover the weeks you do not. Add equipment, software, insurance, and any professional fees.

Build the rate from the bottom: target annual income, plus taxes, plus benefits you now self-fund, plus business expenses, divided by realistically billable hours. The result is often startling relative to a salary comparison, and it is the number that actually sustains the business rather than slowly depleting it.

Consider whether hourly is even right. Hourly billing caps earnings at hours available and penalises you for getting faster — improving at the work reduces income for the same output. Project or value-based pricing decouples what you charge from how long you take, which rewards expertise instead of taxing it. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.