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3 proven systems to find (and raise) freelance hourly rates

Finding your freelance hourly rate can be confusing. Use these 3 simple systems and get to work! (+ how to raise your rate)

Ramit Sethi

Deciding on a freelance hourly rate can be nerve-wracking — especially if you’re a new freelancer.

You don’t want to charge too much and lose potential clients. On the other hand, you don’t want to undersell yourself and lose out on potential profits.

So what’s a new freelancer to do?

Luckily, there are three proven systems that you can use to find a good freelance hourly rate to start with. I’m going to walk you through each one and even give you real-life examples of rates many freelancers use every single day.

Let’s get started.

Bonus:If the COVID-19 pandemic has you worried about money, check out my free Coronavirus Proofing your Finances guide and protect your money during this pandemic!

3 key things to remember for a good freelance hourly rate

Before you jump into the rules of thumb to calculate your freelance hourly rate, keep in mind three things:

  1. Remember your overhead. Freelancing gives you a lot of freedom and flexibility when it comes to when and where you work. However, freelancing can also be a cost burden in unexpected ways too. You need to factor that in when considering your rate.For example, you might rent out a coworking space (~$200/month). You’re going to need internet (~$50/month). You’re going to need phone service to take client calls (~$70/month). All of that added up is going to impact your bottom line.
  2. Have a goal salary. Ask yourself, how much do I want to earn in one year? Factor in your overhead as well as your monthly expenses to find out what your goal salary would be.Not only will this come into play later, but setting goals can give you focus and motivation to finish your objectives. For more information on setting a good goal that you’ll accomplish, check out my article on SMART objectives.
  3. This is just the start. It’s easy to get dejected as a new freelancer when you look at your first freelance hourly rate. It’s probably going to be low in all likelihood. You might even work for free occasionally while you’re building up a good portfolio.BUT it’s important to keep in mind that this won’t be your salary forever. It might seem low at first — but freelancing allows you to scale your earnings. That’s part of the reason why I LOVE it so much.

Later, I’ll show you exactly how you can scale your freelance hourly rate so you’re earning more. For now, let’s jump into the first system to find an hourly rate.

Freelance hourly rate system #1: Drop three zeros

Remember your goal salary? Take that number and drop three zeros from it.

Voila, you have an hourly rate!

For example, say you’d really like to earn at least $40,000. Just drop the three zeros from the end and you now have your rate: $40 / hour.

“Hey! That math doesn’t make any sense,” you might be saying. “If I work eight hours a day for $40 an hour, my salary would be $76,800 a year!”

That’s true. However, this rule of thumb accounts for the fact that you won’t be working eight hours a day in your freelancing role. Sporadic hours and spans of time when you just don’t have work to do is the nature of freelancing.

Also, the clients don’t have to pay taxes and benefits. You do. You also may have to cover some of your own materials or transportation costs.

This method might not be good if you’re trying to charge for your very first client. You’re still new after all. BUT it can give you a good idea of where you can go and charge later when you get experience.

If you’re still stuck on what your goal salary should be, check out sites like PayScale or Glassdoor for good average pay rates for your freelance gig.

Freelance hourly rate system #2: Double your resentment number

I love this one because it’s effective AND it’ll vary from person to person.

Ask yourself: What’s the lowest rate I’ll work for that’ll leave me resentful of my work? This the number that is your floor — the absolute lowest amount you’ll work for, but you’ll resent the work because it’s so low.

Once you have that number, now double it. THAT is your hourly rate.

Say you’ll work for $10 / hour at the VERY LEAST. You won’t like it but you’ll do it. Now just double that number so you get your freelance hourly rate of $20 / hour.

Now, I want you to just be really careful about the double your resentment strategy because it’s easy to get delusional about it — especially if you’re a beginner.

I know because I have been very, very delusional in my day. I remember when I started a company a while back. We grew it a little bit, and all of a sudden, we had some people talking to us about potentially buying the company. But we were completely delusional about how much it was worth.

When we met to negotiate with someone about buying the company, he said, “So what do you guys think? Any numbers in your head?” And we kind of danced around the subject, but ultimately, we got down to a number we thought was fair — and he literally laughed.

He asked, “How’d you guys come to that number?” And we really had no justification. We just said, “Yeah, that’s what we’re worth. We think that that would be a nice number. You know, we could brag to our friends about it.”

Of course, it had no basis in reality.

Now, your resentment number is probably equally delusional. You may say, “Oh, I wouldn’t tutor someone for less than $25.00 an hour.” The truth is, you may need to do that, especially at first to get your first few clients.

After you get three, four, five paying clients, you’re going to have a much better idea about what your real resentment number is.

Freelance hourly rate system #3: Do what the next guy does

I really like this method because of its simplicity.

When in doubt, do what the next guy does.

What does this mean? Find the going rate for other freelancers in your experience level and charge that amount or just a little above.

Many freelancers hate to hear this. They’d rather say things like, “Charge what you think you’re worth and ignore everyone else!”

Sorry, but here’s a reality check: Supply and demand are real.

As someone who frequently hires freelancers, I can attest to this. A while back, I had two different freelancers charging two different prices. I’m talking about a difference of 100%.

Both freelancers were equal in quality. However, one was charging DOUBLE the other one because they clearly didn’t know the going rate.

Who do you think I hired? Of course, I’m not going to pay double the price. As a client, I’m going with the cheaper option!

That’s why it’s so important to find the going rate and charge equal to that or just a little bit over (~10% more).

Here are a few good ways you can find the going rate:

  • Check job listings on sites like Glassdoor to see what other companies are paying.
  • Go on sites like Upwork and Fiverr to see what freelancers charge.
  • Google average hourly rates for your specific industry.
  • Ask your friends or colleagues who have hired freelancers before.
  • Ask any freelancer friends of yours what they charged.

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Still stuck? Try these freelance hourly rates

If you’re still stuck on this (which is totally fine), here are a few good starting numbers for beginners:

  • Writing and editing: $30 / hour
  • Graphic design: $40 / hour
  • Tech / programming: $50 / hour

This number will vary on your market, your positioning, and your level of experience. Remember the number though so you can quote it when you’re asked (you’ll look more professional that way).

Also, keep your rates flexible. These numbers are just starting points.

Your standard rate might be $40 / hour BUT if you really like a project a client offers you, you might be willing to do it for $20 / hour or even for free. When you do that, you might be able to ask your client to revisit the payment question in a month’s time. If you’ve done extraordinary work, you’ll have a huge bargaining chip when it comes to negotiating your rates.

Don’t spend more than 30 minutes thinking this over. Just pick a number and spend your time testing and validating it with your clients.

That’s a much better use of your time than debating it and running endless calculations in your head as to how much you can make.

To help you, even more, check out the two videos below all about what to charge. The first one is a part of a discussion I had with Chase Jarvis. The second is a speech I gave during a past 99U conference. Enjoy!

How to raise your freelance hourly rate

When it comes to raising your freelance hourly rate, it all boils down to when you should raise your rates — not necessarily how much you should raise it by.

You don’t want to increase your rate right after you agree to your very first project with a client. After all, you haven’t proven yourself to them yet.

Why should they pay you more money when you haven’t given them anything worth paying more for?

Instead, you’re going to increase your rate only after you deliver a high-value product.

I’ll say that again:

Increase your rate after you deliver your client a high-value product.

Did you:

  • Just finish a landing page that generated a ton of qualified leads?
  • Create an email campaign with a record-high open rate?
  • Have a blog post go viral and increase traffic by 200%?

That’s why I LOVE increasing rates. It encourages you — the freelancer — to do great work and deliver fantastic products while letting the client know that you should be valued.

You can also raise your rates through referrals. Referrals are clients that you get from existing clients and they are the lifeblood of any freelancer.

For a few reasons:

  1. You can raise your prices when you get a referral. The client who referred you has automatically added value to your work by recommending you. That means you can charge more for your work.
  2. You get better clients. When you charge more, you’ll start attracting high-quality clients who can afford you. They’re also much less likely to waste your time if you’re being paid top dollar. It’s a win all around.
  3. You can more than double your income. Check out this case study from a freelance project manager who went from charging $25 / hour to $75 / hour just by getting a referral. This is a HUGE win.

“At this point, the majority of my clients and contracts come through referrals,” says LaPointe. “When clients are happy with what I’ve done, it’s natural for them to recommend me to their friends and colleagues.”

And asking for referrals is easy — if you have the right script.

Luckily, we have a proven script from our article on how to get clients to help you ask for referrals:


I’m so happy to hear that you enjoyed my work. If you know of anyone else who’s looking for my services as well, I’d be grateful if you passed my contact information along to them.

Thank you,


It’s simple, direct, and gets results.

BONUS: The Ultimate Guide to Making Money

If you want even more information on becoming a freelancer, be sure to check out our articles on the topic below:

If you’re really interested in making money in freelance marketing, we here at IWT have a gift for you: The Ultimate Guide to Making Money.

In it, we’ve included our best strategies to:

  • Create multiple income streams so you always have a consistent source of revenue
  • Start your own business and escape the 9-to-5 for good
  • Increase your income by thousands of dollars a year through side hustles like freelancing

Download a FREE copy of the Ultimate Guide today by entering your name and email below — and jump into freelance marketing today.

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