Figuring out what to charge doesn’t have to be complicated.
Start by adding up everything it costs to run your business — software, equipment, marketing, and so on — then factor in the salary you want to pay yourself. It’s also smart to build in a profit margin (around 30% works well) to cushion slow periods or unexpected expenses.
To walk through an example: a $60,000 salary plus $5,000 in business expenses plus a 30% profit margin puts the annual cost of doing business at $84,500.
From there, think about how many hours you’ll actually work in a year. Once you subtract holidays, vacation, and sick days from the standard 260 weekdays, most freelancers end up with around 1,880 realistic billable hours — and that’s the number you want to work with.
Now here’s where it comes together.
Take your annual costs and divide by your available hours. In this example, $84,500 ÷ 1,880 lands at roughly $45/hour. Once you have your number, do a quick check against market rates in your area and field — and if your skills are in high demand, you may be able to charge even more.
The bottom line? Know your costs, know your worth, and quote your rate with confidence.
