How to Set Your Freelance Rates for the First Time

The Blank Rate Field Problem

You've finally decided to go freelance. Your skills are solid, your portfolio is ready, and you've even set up that shiny new website.

Then comes the moment of truth: a potential client asks, "What's your rate?"

Your mind goes blank. You start second-guessing everything:

• "If I say too much, they'll laugh and hang up."
• "If I say too little, I'll be working for peanuts."
• "What if everyone else charges half of what I'm thinking?"

This paralysis is completely normal. In fact, 67% of new freelancers admit they underpriced their first projects—often by 40% or more. The good news? You can avoid that mistake.

Here's exactly how to set your freelance rates for the first time, with real math and actionable steps.

Step 1: Calculate Your Minimum Viable Rate

Before you think about what the market will pay, figure out what you need to earn. This prevents you from accidentally agreeing to work that doesn't cover your bills.

The Formula

Annual Salary Goal ÷ Billable Hours = Minimum Hourly Rate

But here's the catch most new freelancers miss: you won't bill 40 hours a week.

Between marketing, admin, invoicing, and client acquisition, most freelancers bill only 20-25 hours per week. Let's do the math:

Your Goal	Billable Hours/Week	Weeks/Year	Minimum Rate
$50,000	25	48	$42/hour
$75,000	25	48	$63/hour
$100,000	25	48	$83/hour
$150,000	25	48	$125/hour

Important: This is your floor, not your target. You should charge more to account for: - Taxes (set aside 25-30%) - Health insurance - Equipment and software - Retirement savings - Slow months

A good rule of thumb: Add 30-50% to your minimum rate to get a sustainable number.

Step 2: Research Market Rates (Without Getting Paralyzed)

Your minimum rate tells you what you need. Market research tells you what's possible.

Where to Find Real Data

1. Glassdoor / Indeed: Search for full-time roles in your skill area. Divide annual salary by 2,000 hours for an hourly baseline—then add 30% (freelancers don't get benefits).

2. Freelance Rate Calculators: Tools like Bonsai and And.Co aggregate self-reported rates by industry and location.

3. Industry Surveys: Look for annual surveys in your niche (e.g., AIGA Design Census for designers, Contently for writers).

4. Ask Other Freelancers: Join Slack communities, Reddit subs, or Twitter circles in your industry. People are surprisingly willing to share ranges.

What You'll Find

For most creative and technical fields in the US (2025):

Experience Level	Typical Hourly Range
Beginner (0-2 years)	$35-$75/hour
Intermediate (2-5 years)	$75-$125/hour
Expert (5+ years)	$125-$300+/hour

Don't anchor on the low end. If you have relevant full-time experience, you're not a "beginner freelancer"—you're an experienced professional who's new to freelancing.

Step 3: Choose Your Pricing Model

Hourly rates are simple to start with, but they're not always the best choice.

Hourly Pricing

Pros: - Easy to explain - Low risk for new projects - Fair for scope creep

Cons: - Penalizes efficiency (faster = less pay) - Clients focus on hours, not results - Income ceiling limited by time

Best for: Ongoing retainers, undefined projects, hourly consulting.

Project-Based (Fixed) Pricing

Pros: - Rewards efficiency - Clients care about outcomes - Higher earning potential

Cons: - Requires accurate scoping - Risky if scope changes - Hard to price early on

Best for: Defined deliverables (websites, logos, articles), repeat project types.

Value-Based Pricing

Pros: - Highest earning potential - Aligns your success with client success - Positions you as a partner, not vendor

Cons: - Requires deep discovery - Hard to quantify for some services - Takes confidence to propose

Best for: High-impact projects where you can tie your work to revenue (conversion optimization, sales copy, strategic consulting).

The New Freelancer Sweet Spot

For your first projects, consider project-based pricing with an hourly backstop:

"This project is $2,500 for the defined scope. If requirements change significantly, I bill additional work at $100/hour."

This gives you predictability while protecting against scope creep.

Step 4: The Quote Confidence Framework

You've calculated your rate. Now you need to actually say it out loud without flinching.

The 3-Second Rule

When stating your rate, say it and then shut up for 3 seconds. Don't: - Immediately discount - Apologize - Explain why you're "worth it"

Silence is powerful. Let the client respond first.

The Sandwich Technique

Structure your quote like this:

1. Value statement (what they get)
2. Price (stated confidently)
3. Next step (moves conversation forward)

Example:

"Based on what we discussed, I'll deliver a complete brand identity package including logo, color palette, and style guide. The investment is $3,500. If that works, I can send over my project agreement today."

Notice: No "I think" or "maybe" or "does that work?" Just facts.

Handling "That's More Than We Expected"

This isn't always a no—it's often an opening for negotiation. Respond with:

"I understand. Can you share what range you had in mind? That'll help me see if we can adjust the scope to fit."

This shifts the conversation from "you're too expensive" to "let's find a fit."

Step 5: Avoid the Classic New Freelancer Mistakes

Mistake 1: Racing to the Bottom

When you're new, lowballing feels safe. It's not. Low rates attract: - Difficult clients who expect the moon - Price-shoppers who'll leave for cheaper options - Projects that drain your time and energy

Better approach: Start at your calculated rate and let the market tell you if you're off.

Mistake 2: Comparing to Overseas Rates

Yes, someone in another country might charge $15/hour for similar work. You're not competing with them. You're competing with: - Reliability - Communication quality - Cultural understanding - Time zone overlap

Clients who want $15/hour work aren't your target clients.

Mistake 3: Charging Different Rates for Different Clients

This backfires fast. Word gets around. Stick to your rate—adjust scope instead.

Mistake 4: Not Raising Rates

Your first rate isn't permanent. Plan to increase by 10-20% after your first 5 projects as you build confidence and testimonials.

The Anonymous Alternative

Here's an uncomfortable truth: traditional rate negotiations are broken.

You share a number. They counter lower. You both posture. Someone "wins," but usually both parties leave wondering if they got a fair deal.

That's why we built FairPrice.

Instead of the back-and-forth dance:

1. Both you and your client submit budget ranges anonymously
2. If they overlap, you both discover the "fair" price in the middle
3. No anchoring. No awkward negotiations. Just math.

It works especially well for new freelancers who hate the guessing game. You submit what you need, they submit what they have, and you instantly know if there's a fit—without either party influencing the other.

Your Action Plan

1. Calculate your minimum viable rate using the formula above
2. Research 5-10 market data points for your specific skill and experience level
3. Add 30-50% to your minimum for sustainability
4. Practice saying your rate out loud until it feels natural
5. Quote your first client using the sandwich technique

Remember: Your first rate isn't carved in stone. It's a starting point. You'll refine it as you learn what the market values about your specific work.

The only mistake is not starting at all.

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Struggling with the rate conversation? Try FairPrice to skip the negotiation dance entirely. Both parties submit budgets anonymously, and if they match, you've found your fair price.