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Cover image for The Magic Freelance Rate Formula
Devon Campbell
Devon Campbell

Posted on • Originally published at raddevon.com on

The Magic Freelance Rate Formula

If you’re brand new to freelancing as a web developer, one of the first questions you need to answer is, β€œHow much do I charge?” The fastest, easiest way to answer this question is using the magic freelance rate formula. It’s a two-step process:

  1. Think of a yearly salary that would allow you to live comfortably. If you were looking for a full-time job, what would you want to be paid?
  2. Divide that yearly salary by 1,000.

That gives you your hourly rate. If your ideal salary is $40,000, you need to charge $40 an hour. If you want to make, $58,000 a year, charge $58 an hour. If you want to cross that six-figure mark and make $100k, charge $100 an hour.

The magic formula isn’t perfect, but it gets you pretty close to a rate that should work for you. It has enough headroom built in to account for many of the costs and factors you might not think of when trying to determine your own rate, including allowing you to pay for your own benefits.

πŸ“— If you’re looking for more accuracy, or if you want to be absolutely sure you have all your bases covered, the magic formula may not be for you. Check out my soon-to-be-released book Freelance Web Development Pricing instead. It’s the definitive guide to all things pricing when it comes to freelancing as a web developer. It will teach you to confidently set and justify your pricing. Hit the link to get a free chapter! πŸ“—

Top comments (8)

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mike_hasarms profile image
Mike Healy

Then there's part two β€” finding 1100+ productive, billable hours per year :)

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bobsbeenjamin profile image
Ben Clifford

I would probably aim for 2,000+ hours

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mike_hasarms profile image
Mike Healy

Ideally, but if you're speaking about only directly billable hours that is a lot.
Upskilling, doing proposals, meeting prospective clients, doing admin work like preparing for taxes, managing technology is all separate to the billable work.

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bobsbeenjamin profile image
Ben Clifford

That's some good insight. I've never been a contractor.

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theague profile image
Kody James Ague

How much do you want to make in a year? $100,000 for a nice easy number. How many projects do you want to deliver per month? We'll say 1. That means 100,000/12 so you need to find clients willing to pay $8,400 per project. Now change your methods to match your goals. Average 22 working days per month you need to make $48+/hr per 8 hour working day.

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garrett profile image
Garrett / G66 / megabyteGhost

I prefer to use value based pricing

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fly profile image
joon

It always felt difficult when trying to set my freelancing rates(and convincing clients that I cost more).
Will definitely reference this on my next contract!

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