I’m curious to hear how you all approach one of the trickiest aspects of freelancing: setting your rates.
One thing I struggled with the most is figuring out how much to charge. I don’t want to undercut myself, but I also don’t want to price myself out of potential gigs.
Here are some questions for you:
Do you prefer charging by the hour or by the project?
Do you adjust your rates based on the client’s budget or location?
How do you handle rate increases, especially with long-term clients?
Do you ever offer discounts or negotiate on price? How do you ensure you’re still getting paid what you’re worth?
Looking forward to your insights and maybe even a few pricing horror stories.
Uhh! Great topic!
I had such a hard time figuring out my rate when I first started sending out quotes for gigs. There’s not a “how to figure out your rate as a freelancer” Google search result I haven’t read. The rule of thumb I ended up following was the “2,5x” suggesting that you multiply your hourly rate in a traditional job (monthly salary/monthly work hours) with 2,5. This should then be able to cover your base salary, vacation days, sick days, and a bit of savings etc.
I use this method for contract based gigs, usually long(er) term or open ended. The longer the term of the contract (more stability and security for me), the more I’m willing to negotiate on price. For project based gigs with short(er) term contracts I opt for project/value pricing - anchored in the estimated time/resource scope of the project.
Now to the horror stories
1st story: The first time I had to scope out a project and quote a price I got too cocky and missed the target by miles!!! I clearly recall the call with the potential client after he had read the quote and never in my life have a seen such beautiful back-paddling from his side and embarrassing negotiation-willingness from my own side Let’s just say, I’m not surprised that I never heard from him again.
2nd story: When I started freelancing for real earlier this year I was SO desperate to land a gig that I ended up discounting my rate so aggressively and signed a contract paying me less than what I was paid babysitting kids when I was a teenager I’m happy to report to my teenage self, that I’ve learned and grown from my mistakes (and from being broke) since then
I usually set my hourly rate based on the complexity of the project, but I’m flexible—if a project is particularly intriguing, I’ve been known to accept a lower rate. So, it really comes down to a mix of factors. With experience at a major consultancy firm, I have a solid understanding of market rates, so I’m confident my pricing aligns with industry standards. But I totally get that it can be challenging when you’re just starting out as a freelancer.
I mostly charge by the project to avoid the time trap, but I’ll go hourly if the scope is unclear ( I also use the 2.5x like Cirkeline for these cases)
Sometimes I also do adjust based on the client’s budget, but I’m careful not to go too low. I offer discounts sparingly, usually for long-term contracts or larger projects, but always ensure it’s still worth my time.
For me, I prefer to charge by the project rather than by the hour. It allows me to account for the entire scope and value of the work, and I find it easier to manage my time that way.
To ensure I’m getting paid what I’m worth, I usually research industry standards and adjust based on my experience and the complexity of the project. I also make sure to factor in long-term client relationships by reviewing rates periodically and discussing any necessary adjustments based on the evolving scope of work.
Like some others here, I’ve also found that using the “2.5x rule” as a benchmark helps ensure I’m covering my expenses, taxes, and also putting something aside for savings.
I’ve had a few learning experiences along the way, especially early on when I was tempted to lower my rates to land projects. Now, I’m more confident in my value and set my rates accordingly.
Thank you for raising this important topic for us freelancers. I’m happy to share my experience:
Hourly vs project-based pricing:
I use a mixed approach. With new clients, I prefer project-based rates based on overall value. For long-term clients, I use hourly rates, especially for maintenance work.
Rate adjustment:
I try to maintain consistency, but I consider the client’s context. Flexibility is important, but without devaluing my work.
Rate increases:
With long-term clients, I communicate increases in advance, explaining the reasons (e.g., inflation, new skills). I prefer gradual increases to avoid surprises.
Discounts and negotiations:
For new projects (fixed rates), I keep a 10% margin for potential negotiations.
I’ve learned that clarity and open communication prevent many pricing problems with clients.
I clearly recall the call with the potential client after he had read the quote and never in my life have a seen such beautiful back-paddling from his side and embarrassing negotiation-willingness from my own side 
Let’s just say, I’m not surprised that I never heard from him again.
