How should I set my average hourly freelance rate?
Based on our recent Freelancer Income Survey, nearly 50 percent of freelancers find jobs via online marketplaces. We surveyed over 23,000 freelancers from across the globe to help freelance professionals determine what they should charge (based on factors like education, field of expertise, etc.) in order to build a successful online career. If you’re struggling with establishing a fee structure, keep these important factors in mind.
Average Freelancer Hourly Rate
The average freelancer (globally) earns $21 per hour, according to our extensive research, but theaverage hourly wage can vary widely depending on your location as well as the number of hours you work.
Your skill set also plays a major role in the rates you can command. Our survey indicates that professionals with legal skills, such as contract creation and consulting, earn significantly more per hour than design professionals. Surprising even to us, freelancers with an advanced degree did not earn significantly higher wages than those without, indicating that experience is much more valuable than formal training.
Charging Too Much for Freelance Services
If you set your hourly rates too high, potential customers might overlook your bid in favor of other professionals. While businesses are willing to pay a premium for excellent work, they can’t exceed their budgeted allowance or spend money without a reasonable expectation of recouping their expenses.
This is why many professionals start their careers on freelance marketplaces with slightly lower hourly rates. After they earn positive feedback from a number of clients, they increase their rates to reflect their reputation.
Charging Too Little for Freelance Services
Some freelancers swing the other direction entirely and set their rates well below the competitive range. They want to secure as many jobs as possible, so they’re willing to reduce their hourly rate to underbid other professionals.
This strategy might result in a greater number of accepted bids, but it also undervalues your work. Once customers grow accustomed to paying you an extremely low rate, they will balk when you decide to increase your rates. Additionally, if you can’t pay your bills and take time off, you’ll burn out from overwork and dissatisfaction with your job.
And one last lesson: Don’t undercharge yourself by charging by the hour just because you happen to be good at what you do and can do it quickly and efficiently. Value the work you do any others will value you in return.
Finding the Right Balance
Consider the number of hours you work per week, your total expenses every month, and the number of jobs you expect to accept at any given time. BlogHer, an online guide to news and trends, cautions freelancers to remember that most self-employed professionals do not bill a full 40 hours every week. You’ll devote some of your time to preparing proposals, marketing your services, and communicating with clients.
If you haven’t already, download our free freelancer income survey. Knowing what other professionals charge in your industry helps you establish a reasonable hourly rate without selling yourself short.
Furthermore, pay attention to the demand for your services as you navigate online marketplaces like Upwork (formerly Odesk). If customers seem increasingly interested in your services, consider raising your hourly rate. This indicates that customers appreciate your work and prefer you to other professionals.
Of course, setting your average hourly rate for freelance services is stressful, but trust your instincts as well as your ability to conduct research. Also, pay close attention to the pricing trends for specific industries, like freelance writing. The more you know about the market, the better you can leverage your skills for financial success.