How I Set My Freelance Rate

A quick and easy guide

Photo by: Kaboompics.com

One of the top questions new freelancers ask is “How do I know what to charge?”

It can be difficult. You don’t want to undercharge, and similarly, you don’t want to overcharge and potentially price yourself out.

So here’s the simple framework I used to set my freelance rate:

1. How much do I actually need?

The first thing I did when I went freelance was work out what I actually needed to make.

First, you need to make a budget (I know, it’s boring—but it’s so important). Put all your expenses into it. And I mean everything. Every bill, every subscription (yes, even that random £2.99 Apple one that comes out every month). You need to know exactly what you are working with.

At the time, my total expenses were £1070 a month.

Now you’ve got your expenses covered, look at how much realistically you can have as disposable income every month.

To do this, I like to take a weekly approach. So when I was first starting out and I was desperate to quit my job, I knew I could happily have £50 of disposable income a week. That would cover if things needed replaced, if I wanted to go and have lunch with my friends, or it was somebody’s birthday.

So in an average 4 week month, that would be £200.

Therefore, the minimum I needed to earn would be £1270.

This also helps you work out how many clients you’ll need to cover that amount (we’ll get to that later).

Note: For me this didn’t include paying into a pension, putting any money in savings, etc. This was just the bare minimum I needed every month. I also highly recommend having savings in place should anything go wrong (like when I had a client who didn’t pay me for 8 months).

2. Taking the average

I wanted to make sure I wasn’t undercharging or overcharging. So I did what most people do when they don’t know something—I googled it. I searched for the average day rate for freelance copywriters in the UK (change the country to your equivalent).

This is what Google came up with:

According to recent data from ProCopywriters, the average day rate for a freelance copywriter in the UK is around £433.

Key points about UK freelance copywriter day rates:

• Range:

  Typically, a freelance copywriter in the UK can expect to charge between £300 and £500 per day depending on their experience and specialization.

• Factors affecting rate:

  Location (e.g., London usually commands higher rates), industry expertise, experience level, project complexity.

• New vs. experienced:

  Junior copywriters might charge closer to £300 per day, while highly experienced copywriters could reach £500 or more.

So now, based on your level of experience, you’ll know roughly where to price yourself in the market.

Note: I definitely undercharged at the beginning, which I talk about a bit more here.

3. Scalability

I don’t charge all my clients equally—I have a sliding scale.

For example, retainer clients get a discounted rate as a thank you for giving me long-term income securement.

I have also given out rate discounts in the past for local charities and NGOs.

4. The Tax Man

Unfortunately, here in the UK (and in most countries) we don’t get to keep everything we earn. We have to hand a percentage of it over to the tax man.

I highly recommend speaking to an accountant for advice, but a general rule of thumb for freelancers starting out in the UK is to save 30% of your income for tax and National Insurance.

4. Setting your rate

So, say your expenses are the same as mine were (£1270), and you’re in the junior stage of your career. You would be looking to charge around £300 a day. But, you also need to save 30% for tax.

That would mean you need to make £1651 a month. To make this, you would need to work 5.5 days a month. Or, if you price per project, maybe aim for 2 clients that pay you £700 and one that pays you £300.

Now you not only know what to charge, but you also know how much work you need to secure every month to ensure you can pay all your bills (and your tax) and still have some spending money left over.

I recommend doing this exercise every year, to ensure you’re still pricing accurately. Remember every year your experience goes up (and unfortunately so does inflation).

It’s also worth doing this if a big life change comes along, for example, we are planning to move home soon, so I’ve been running these numbers again based on the cost of our new place so I know how much extra work I need to cover those expenses.