Question 1

How is the freelance rate calculated?

Accepted Answer

We take your target take-home income, add 45% for taxes, benefits, and business expenses, then divide by your annual billable hours (based on your work schedule and billable percentage). We then adjust for your industry and experience level.

Question 2

What counts as non-billable time?

Accepted Answer

Non-billable hours include client acquisition, proposals, invoicing, bookkeeping, marketing, professional development, admin, and communication. Most freelancers spend 30–50% of their time on non-billable work.

Question 3

Should I charge hourly or project-based?

Accepted Answer

For fixed-scope projects, project-based pricing is almost always better — it rewards efficiency and lets you capture more value. Use hourly rates for ongoing retainers, consulting calls, and open-ended engagements.

Question 4

How often should I raise my rates?

Accepted Answer

Review your rates every 6 months. Raise rates for new clients immediately when you're consistently booked above 80% capacity. Grandfather existing clients or give 30-day notice for increases.

Question 5

What expenses should I factor into my freelance rate?

Accepted Answer

Include self-employment taxes (15.3% in the US), health insurance, retirement contributions, software subscriptions, equipment, coworking space, liability insurance, and an emergency fund buffer of at least 3 months of expenses.

Question 6

How do I handle clients who say my rate is too high?

Accepted Answer

Never lower your rate — instead, adjust the scope. Offer a smaller deliverable at a lower price point, or explain the ROI of your work. Clients who push back on price often aren't your ideal clients.

Question 7

What is a good billable utilization rate?

Accepted Answer

Most solo freelancers achieve 60–70% billable utilization. Agency freelancers may hit 75–80%. If you're below 50%, focus on streamlining your sales pipeline and reducing admin overhead.

Question 8

How do I set rates when starting out as a freelancer?

Accepted Answer

Research market rates on platforms like Glassdoor and Upwork for your skill level. Start at the lower-mid range to build a portfolio and testimonials, then raise rates by 10–20% every 3–6 months as you gain experience and reviews.

Question 9

Should I offer discounts for long-term contracts?

Accepted Answer

A small discount (5–10%) for guaranteed monthly retainers can be worthwhile since it reduces your sales overhead. Avoid deep discounts — they devalue your work and are hard to reverse.

Freelance Rate Calculator

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