Determining your hourly rate is the process of calculating the price you charge clients for one hour of your work. It's a fundamental step for any freelancer to ensure business sustainability.
What is Determine hourly rate?
It's the calculation you perform to set your freelance service price per hour. This figure should cover your business expenses, taxes, and personal income goals. It's not just your desired salary divided by hours.
Why is this important?
Setting the right rate is crucial for your financial health. Charging too little leads to burnout and unsustainable work. Charging appropriately values your expertise and ensures you can cover all business costs and save for the future.
How does it work?
Start by calculating your annual living and business costs. Add your desired annual profit. Divide this total by the number of billable hours you realistically expect to work in a year. This gives you a baseline hourly rate.
Pros and cons
Pros include straightforward billing for variable-scope work and easy client understanding. Cons can include penalizing efficiency, as you earn less for faster work, and potential client scrutiny over time spent.
Conclusion
Determining your hourly rate is a vital business calculation. Revisit it annually as your skills, expenses, and market demand change. A well-calculated rate is the foundation of a profitable and sustainable freelance career.
Ready to freelance?
Download the HFS Freelancers app and discover flexible shifts in your area. Or explore more terms in our knowledge base.
