How Much Should I Get Paid as a Freelancer?

There's no exact science to setting a freelance rate, and pay varies a lot between industries, but a simple formula gives you a genuine starting point rather than a guess. From there, it comes down to picking the right pricing structure and adjusting for each client and project.

Key Takeaways

• Decide your pricing structure first, hourly, daily, or by project, since clients sometimes ask for a specific one.
• A useful starting formula: (Annual Salary + 30%) ÷ 220 working days, the 30% covers lost benefits like holiday and sick pay.
• Research what peers in your industry actually charge, through direct conversations or published salary reports.
• Your rate isn't fixed. Contract length, career value, and how a client treats you are all reasonable factors to adjust for.
• Incorporating as a limited company protects your personal finances and can add credibility with clients.

How Should I Structure My Pricing?

Hourly. Simple to track and invoice, though it can undervalue your time and often means keeping a detailed timesheet for clients.

Daily. A fixed fee for a day's work, similarly easy to track. Worth defining what actually counts as a "day" upfront, say 7.5 hours, so you're not paid the same for a 7.5-hour day as a 14-hour one.

By project. Suits freelancers juggling multiple clients, priced against the project's scope and your own estimate of how long it'll take. Works best once you've got enough experience to estimate accurately, since underestimating eats directly into your margin.

It's worth working out your rate under more than one structure, since a client may specifically ask to pay a certain way.

How Do I Actually Work Out My Rate?

Freelance rates tend to run higher than an equivalent salary, since they come without the benefits an employer would otherwise provide: paid leave, pension contributions, sick pay, and similar schemes. As a freelancer, you're covering all of that yourself, so it needs factoring into your rate, not treated as a bonus you're forgoing.

A useful starting formula:

(Your Annual Salary + 30%) ÷ 220 Working Days

The 30% accounts for lost benefits like holiday pay, sick leave, and pension. The 220 days is a rough estimate allowing for gaps between jobs and time off, lower than the roughly 260 working days in a standard employed year. Treat this as a starting point, you'll likely adjust it based on each client and project.

Check what others are charging. Talking rates with peers, on LinkedIn or at industry events, can feel uncomfortable, but it genuinely helps you and others land on a fair industry standard rather than guessing in isolation.

Look at published salary data. Recruitment agencies often publish annual salary reviews by industry, and some professional bodies and unions do too. A quick search for your industry plus "salary report" is often enough to find a useful benchmark.

How Do I Actually Ask a Client for My Rate?

Charge what you're worth and what you genuinely need to sustain the work, but expect your rate to flex depending on the client and project rather than staying fixed across every job.

Contract length. A longer contract can justify a lower rate, since it gives you steady income and saves you the time and effort of constantly finding new work. A short contract is reasonable to price at a premium.

Career value. A dream client, a recognisable name, or genuine skill-building potential can justify accepting a slightly lower rate, since the exposure or experience often pays off later, including letting you raise your rate once you've upskilled.

How the client treats you. A client who pays on time and is straightforward to work with is reasonably worth a slightly lower rate than one who's consistently difficult, where a premium is fair compensation for the extra friction.

Should I Set Up as a Limited Company?

It's worth considering once you're freelancing seriously. A limited company is a separate legal entity from you personally, so you're not personally liable for the company's debts, and it can also help protect your business name and add a more professional edge when clients are comparing freelancers.

If that sounds like the right move, our range of company formation packages can take care of the registration itself, so you can stay focused on pricing your work properly rather than the paperwork.

FAQs

What's a good formula for working out my freelance rate?

(Annual Salary + 30%) ÷ 220 working days is a reasonable starting point, with the 30% accounting for lost employment benefits like holiday and sick pay.

Should I charge hourly, daily, or by project?

It depends on the work and the client. Hourly and daily rates are simpler to track, while project-based pricing suits experienced freelancers juggling multiple clients at once.

Is it normal to charge different clients different rates?

Yes, genuinely common. Contract length, the value of the opportunity, and how straightforward a client is to work with are all reasonable factors to adjust your rate around.

Does becoming a limited company help as a freelancer?

It can. It separates your personal finances from the business, protects your business name, and can add credibility when clients are comparing freelancers to work with.

This article is for general information only and does not constitute financial or legal advice. Rates vary significantly by industry and experience, so it's worth researching your specific field before settling on a number.