How to Price Your Freelance Projects Without Undercharging
Here's the uncomfortable truth: most freelancers undercharge. Not because they don't know their worth — but because pricing feels awkward, they're afraid of losing the client, or they simply don't have a system for it.
The result? They work long hours, feel underpaid, and wonder why they're always one bad month away from financial stress. Pricing isn't just about money. It's about sustainability — whether freelancing can actually work as a long-term career.
The math that matters: If you charge $50/hour and work 8 hours a day, 5 days a week, you earn $104,000/year — before taxes, self-employment costs, unpaid time, and business expenses. Factor those in and your effective take-home drops 30–40%. Price accordingly.
The Three Pricing Models
Before you can price a project, you need to pick an approach. There are three common models, each with trade-offs:
Hourly Rate
How it works: You charge by the hour. The client pays for the time you spend.
Best for: Ongoing work, projects with unclear scope, or when the client wants to control the budget.
Watch out: hourly pricing penalises you for being fast. The better you get, the less you earn per project.
Project-Based (Fixed Fee)
How it works: You quote a flat rate for the entire project, regardless of how long it takes.
Best for: Well-defined projects with a clear deliverable and scope.
Watch out: if you underestimate the work, you eat the extra hours. A solid contract with defined scope is essential.
Value-Based Pricing
How it works: You price based on the value the work creates for the client — not how long it takes you.
Best for: Experienced freelancers with a track record. A logo redesign that increases brand recognition is worth more than the hours spent making it.
Watch out: requires a conversation about the client's goals. Not every client is comfortable with this model.
How to Calculate Your Minimum Rate
Regardless of which model you use, you need a floor — the absolute minimum you should charge. Here's how to find it:
Step 1: Figure Out Your Annual Target
What do you need to earn this year? Not what sounds impressive — what you actually need to live on, pay taxes, and run your business. Be honest.
Step 2: Calculate Your Billable Hours
A year has roughly 2,080 working hours. But freelancers don't bill all of them. Subtract time for:
- Admin, invoicing, and bookkeeping (~10%)
- Marketing and finding new clients (~15%)
- Vacations and sick days (~10–15%)
- Unpaid gaps between projects (~10–20%)
Realistically, most freelancers bill 50–60% of their working hours. That's roughly 1,000–1,250 billable hours per year.
Step 3: Do the Division
Divide your annual target by your billable hours. That's your minimum hourly rate. Example: $80,000 target ÷ 1,100 billable hours = $73/hour minimum.
Reality check: If your minimum hourly rate feels high, the issue isn't that you're overcharging. It's that you need to either reduce your expenses, increase your billable hours, or — most likely — accept that freelancing at that income level requires charging what the work is actually worth.
How to Price a Specific Project
Once you know your minimum hourly rate, pricing a project is straightforward:
- Estimate the hours. Break the project into tasks. Estimate each one. Add 20–30% buffer for the unexpected.
- Multiply by your rate. That's your baseline quote.
- Adjust for complexity and value. A project for a Fortune 500 company is worth more than the same work for a startup. A project that will make the client $100K deserves a higher rate than one saving them $1K.
- Round up, not down. If your estimate lands at $1,870, quote $2,000. Round numbers feel deliberate, not desperate.
The Mistake Most Freelancers Make
They look at what other freelancers charge and price themselves at the low end to win the work. This is a race to the bottom — and it doesn't actually win you better clients.
Clients who choose the cheapest option are also the most likely to be difficult, demanding, and slow to pay. The clients who pay fair rates are the ones who value quality, respect your time, and actually enjoy working with you.
Charging more doesn't lose you clients. It filters them — and the filter works in your favour.
Invoice at the rate you deserve
Once you've priced your project, Billzy makes it simple to create a professional invoice, set a due date, and get notified if payment is late. Up to 10 invoices free — no credit card needed.
Get Started Free →The Bottom Line
Pricing is a skill, not a personality trait. It gets easier with practice and confidence. Start with the math: calculate your minimum rate, estimate the hours, and quote accordingly. Then raise your prices by 10% on your next project. You'll be surprised how few people push back.
The freelancers who build sustainable businesses aren't the ones who work the most hours. They're the ones who charge what their work is actually worth.