What’s a good freelance hourly rate to charge? It’s the question that keeps many a freelancer up at night when they are just starting out. What if I charge too much and people will never want to hire me? What if I charge too little, and never make any money? It’s a genuine concern, and one that shouldn’t be taken lightly. Determining your freelancing rate can make or break you when you’re just starting out.
Because, while $25 per hour may seem like a lot of money, you have to remember that it costs money to run your freelance business (software, utilities, advertising, website, etc.). And, that $25 per hour may not be enough to cover the costs. Also, remember that you are responsible for self-employment taxes and possibly health insurance if you have no other means of getting coverage, say through your spouse. Those costs can definitely eat into that hourly rate.
So, I wondered what I could do to help freelancers rest a little easier? What if there were an easy way to calculate your hourly rate based off of what you’d like to earn in a year?
It took me a few weeks of research and spreadsheet wrangling, but I came up with a freelance hourly rate calculator spreadsheet that you can download that will calculate everything for you based on your estimates of costs, hours you’d like to work, profit margin, etc. (see below)[sociallocker id=”86218″]
Download the spreadsheet by clicking on a button below:Excel Version [/sociallocker]
When you open it, you’ll see that it is already populated with some example figures. You can (and should) change anything and everything that is not in a purple cell, which means it’s a locked formula. Play around with the numbers and see what you come up with. It’s very flexible and allows you to:
- Adjust your hourly rate to whatever your financial needs are. Need to be the sole wage earner for the family? Use a higher salary at the outset. Only need part-time work? Then use a lower salary.
- See how adjusting your billable hours, vacation time, etc. can affect your hourly rate. This is good in cases where you may need to charge a lower rate to get work (which I don’t recommend, but I can understand the need).
- Learn where you can cut costs such as advertising, software, and other areas where you have some flexibility.
- Generate more accurate flat rates for fixed-rate projects. All you need to do after you figure your freelance rate is to estimate how long the project might take, then multiply your hourly rate by the number of hours. Voila! You have your flat fee.
But, my favorite thing about this spreadsheet is the confidence you will have in setting your rate, because you have the financial justification to back it up. It’s not just some number you picked out of the air. It has real-life numbers attached to it. Nice, huh?
So, what are you waiting for? Download it (see above) and let me know what you think.