Free guide - Northbench
Most freelancers price by copying what a friend charges and subtracting guilt. This guide replaces that with arithmetic. It takes twenty minutes to read, an afternoon to do properly, and it is the difference between a business and a hobby with invoices.
The fastest honest estimate in freelancing: your minimum hourly rate is roughly your target annual income divided by 1,000. A year has about 2,000 working hours, but you will sell barely half — the rest goes to finding clients, quoting, admin, and being ill — and from every sold hour, roughly a quarter vanishes into tax. Want $50,000? Your floor is $50 an hour. Swallow hard; that is the sound of a fantasy ending.
The full calculation takes five inputs: target income, working weeks (46 is a good year), hours you can sell per week, overhead, and tax set-aside. The formula: floor = (income + overhead) / (weeks x hours x billable fraction x (1 - tax)). Below that number, every job loses you money — the floor is a veto, not a price.
Clients do not buy your hours; they buy a change in their world, measured in money. There are exactly three levers: revenue up, cost down, risk down. A homepage rewrite that lifts a firm's conversion from 1% to 1.6% on 2,000 monthly visits at $4,000 per job moves $48,000 a year. The standard fraction to charge is 10-30% of the value created — not greed, just what makes the deal rational for both sides.
You cannot see the levers from inside your head. Ask: What happens if this doesn't get done? Who does it now? What's different in six months, and what is that worth as a number? The silence after the last question is where the client prices your work for you.
Rate surveys are rumors with decimal points (self-reported, survivorship-biased). Market data has one honest use: it tells you the range buyers expect. Below the range signals "something is wrong." The top says "worth a question." Pick your position deliberately — new portfolio low-middle, proven specialist upper — and never average yourself down: price-buyers are the least loyal, most demanding, slowest-paying clients that exist.
"This comes to $4,800 — half to start, half on delivery." Then stop talking. The pause after a price is not awkwardness to fill; it is the sound of a decision being made. Whoever fills it has just offered to negotiate against themselves. Meet pushback with curiosity, never a reflex discount: cut scope, not margin. "I can do a smaller version — same quality, less scope."
Floor = the veto. Roof = 10-30% of value moved. Range = position, chosen. Number = top third of the bracket, flinch-tested. Vehicle = hourly for open work, fixed for repeats, retainer for judgment. Quote = their words, the lever, the shape, one number, exclusions, terms, expiry. Pushback = curiosity, then scope cuts. Raise = quarterly, 10-20% a year, grandfathered 90 days, in writing.