Start With What You Actually Need to Earn

Before you think about what the market pays, work out your floor — the minimum you need to charge to make freelancing viable. This is your baseline.

Work backwards from your target annual income:

• Start with the net salary you want — say, $60,000

• Add self-employment taxes and national insurance (typically 25–35% depending on where you are)

• Add business costs: software, equipment, insurance, accountancy, marketing

• Add a buffer for unpaid leave, sick days, and slow months — roughly 20% on top

That gives you your target gross annual revenue. Now divide it by the number of billable days you expect to work.

How Many Billable Days Do You Actually Have?

This is where most new freelancers get it wrong. A year has roughly 260 working days. But your billable days are far fewer:

• Subtract 25 days for holidays

• Subtract 10 days for sick leave and unexpected gaps

• Subtract 30–40 days for business admin, sales, proposals, networking, and non-billable project work

That leaves roughly 185–200 billable days. And in your first year, it'll likely be less — building a client base takes time.

If your target revenue is $90,000 gross and you have 190 billable days, your minimum day rate is roughly $475/day.

Check What the Market Pays

Your floor tells you the minimum. The market tells you the ceiling — and sometimes more than you expected. Research rates for your discipline:

• Check freelance rate surveys for your industry and region

• Ask peers or mentors what they charge — most freelancers are more open about rates than you'd expect

• Look at job listings for equivalent in-house roles and compare day rates

• Check platforms like Toptal, Contra, or LinkedIn for posted rates in your category

If the market rate is higher than your floor, your floor isn't your rate — it's just your minimum. Charge what the market supports, not the minimum you need to survive.

Day Rate vs Hourly Rate vs Project Fee

How you charge matters as much as what you charge.

Hourly rate

Good for work where scope is uncertain or evolving. Easy to track and explain. Downside: the better and faster you get, the less you earn per project. Clients also sometimes balk at the total when hours add up.

Day rate

Standard for consultants, developers, and strategists who work on-site or in blocks of time. Cleaner than hourly for both parties. Easier to scale — add a day, add a day rate.

Project fee

Best for defined-scope deliverables: a logo, a website, a report. You price the outcome, not the time. Rewards efficiency — if you complete the project in less time than expected, your effective hourly rate goes up. Requires a clear scope and change management to avoid scope creep eating your margin.

Many experienced freelancers move toward project fees over time. But start with hourly or day rates until you know how long things actually take.

Don't Forget These Hidden Costs

Freelance rates need to cover more than equivalent employment salaries because you're covering costs your employer used to carry:

• Employer's national insurance or payroll tax contributions

• Pension contributions

• Paid holiday and sick leave

• Equipment, software, and workspace

• Professional indemnity and liability insurance

• Accountancy and bookkeeping

• Unpaid gaps between contracts

A freelancer earning $400/day isn't equivalent to an employee earning $400/day. Once you account for these costs, a day rate of $400 might be worth closer to $250 in take-home terms. Factor that in when you're setting your number.

How to Raise Your Rate

Your rate isn't fixed. As you build a track record, specialise, or develop a reputation in a niche, your rate should go up. Ways to move it:

• Specialise. Generalists compete on price. Specialists command premiums. A "web developer" charges less than a "Shopify developer for DTC fashion brands."

• Build a portfolio. Strong case studies with outcomes justify higher rates.

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• Raise rates with new clients first. You don't have to raise rates with existing clients overnight — start charging the new rate to new clients and migrate existing ones gradually.

• Stop justifying your rate. State it. If a client pushes back, that's a negotiation — not a reason to drop your number immediately.

Putting It on an Invoice

Once you've set your rate, make sure it's clear on every invoice. Whether you charge by the hour, day, or project, itemise it so the client can see exactly what they're paying for. A line item like "Strategy and planning — 4 days @ $550/day" is clearer and more defensible than a single total.

Clervo makes it easy to build itemised invoices around your rate — whether hourly, daily, or project-based — and send them professionally from your phone in under a minute.