How To Price Your Service as a Freelancer

Updated: February 27, 2022

Aside from selling stuff, becoming a freelancer is another great way to earn extra income. But how do you calculate and determine your rates as a freelancer?

How do you compute the fair cost of your service for your customers? You certainly don’t want to overcharge, but you also don’t want to sell yourself short.

If you want to learn simple freelancer price calculator strategies, then below are some quick and simple tips.

Start with your salary.

If you’re a teacher that earns P20,000 per month, how much would you ask for tutorial services? Assuming you work 5 days a week, 8 hours a day, then your minimum rate as a tutor should be P125 per hour.

Factor in your incidental costs for doing the service and you have your price. So let’s say that it takes one hour to go to and fro your tutee’s house, and your meal and fare allowance is P200.

Thus, your rate now becomes P450 for a 1-hour tutorial session, plus P125 for every additional hour in the same session.

Round it up nicely if you’d like some breathing room for negotiations. So maybe, give your client the price of P500 for the first hour, plus P150 for every succeeding hour.

Earn from material costs.

Let’s say someone asks you to landscape their garden. You determined you’ll spend P5,000 in materials and P1,000 on incidentals.

Then, let’s say that the project will take 20 hours to finish. Roughly, 5 hours planning and buying materials plus three days working 5 hours each.

First, add 30% to the material cost – so that’s P5,000 x 1.3 or P6,500. Then as a teacher, 20 hours of work costs P125 x 20 or P2,500.

Finally add your incidentals and you have P6,500 + P2,500 + P1,000 or P10,000.

As an option, you may add 10% to the figure just in case the client haggles, and you end up with P11,000 as your price quote for the garden landscaping project.

But landscaping is NOT your line of work, so why base it on the teaching salary?
Because that’s the simplest way to determine how much a person’s time costs. If you want to be more “accurate”, then you can base it on the current industry standards.

Related Post: How Much Should You Charge For Your Product or Service

Consider the industry standards.

Let’s say you have a friend who works as a professional garden landscape artist and you learned that he, as well as most of his colleagues, earn around P30,000 per month – which is roughly P188 per hour.

You now have the option to use P188 instead of P125, for your hourly rate. But you’re not really a landscaper by profession, so if you charge the same rates, then the client might as well hire a professional instead, right?

Indeed! So as an alternative, you can simply charge 80% of the current professional rates. That’s P188 x 0.80 or roughly P150 per hour. If you follow the same process above, then your final price quote would be around P11,500.

Don’t forget your monthly living expenses

If you plan to become a full-time freelancer, then your rates should be able to cover your monthly expenses.

If your cost of living is P35,000 per month, and you plan to work 5 days a week, 8 hours a day as a freelancer, then your rate should be around P218 per hour.

Because you plan to freelance full-time, you can now actually consider yourself as a “professional”, which eventually gives you the option to use standard industry rates.

In our example, since P218 per hour is above the “assumed” industry standard of P188 per hour for garden landscape artists; then you might want to find ways to lower your monthly expenses.

Also, consider creating other sources of income so you can be competitive and charge the P188 per hour standard rate for professionals.

Of course, it is still your option to charge higher, especially if you can deliver unique value to your clients that other professionals don’t or cannot offer.

The ultimate rule

Pricing your service should not be a complicated process, especially if you’re just testing the waters of freelancing. If you want a quick way to calculate your fees, then simply ask yourself…

What’s the lowest income I’m willing to receive to do this job?

Once you can give a specific answer to this question, then you’re already halfway done. Simply add your material cost and incidentals to get your final price.

Of course, this rule is more emotional than logical. It is a “ready, fire, aim strategy“, which can help you move forward if you get stuck in the calculations.

And always keep in mind that, in the world of freelancing, the more projects you take and finish, the more competitive your rates would eventually become.

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  1. As a freelance consultant in online marketing, pricing for my services is one of the difficult to calculate because there are different factors involved like the client budget, competition, target goals, etc. I even feel I am still underpaid 🙁

  2. Good points! I would add that one has to definitely consider as well what stage of building their freelance career they are in so they would know how to effectively set prices. Competition prices also have to be considered.

  3. That clears my head. I was wondering how much is my rate on oDesk, now I have an idea. I am just starting freelancing, so I wont charge that much.

    Thanks for the idea

  4. It is important to tuck a little money away from earnings to replace equipment. A landscaper may break a shovel or need to replace the cutting chain on their chainsaw. Even those working from home must remember electricity for when you are “burning that midnight oil.” What about a replacement computer? How about that cellphone that may be required for your work? My beautiful bride is a academic writer, creating assignments, thesis and dissertations for clients around the world. We know from experience that it is not unusual have an early failure of a computer here in the Philippine climate. Computers do not do well in heat, humidity and dust is a killer. Our plan is to retire a working unit after we have used it for a reasonable service life and purchase a new unit from the equipment budget. Doing this not only allows my wife the use of a new and hopefully reliable computer but she also has a working back-up in the older unit. The same goes for a cellphone. My wife is required by several companies she produces work for to have a cellphone at the ready to stay in contact with the company. We also need at least one working phone to run our family business. In fact, in the early days of setting up our business, my wife had three cell units going all day as she traveled from government office to government office, spoke with our attorney and potential clients. This is important for me also. I am semi-retired but I am an active options trader at night. When my “souped-up” desktop computer failed early a short time ago, I was super thankful we could pull out one of Maria’s older units and get me connected!!!! You can probably guess that the first bills we pay each month is for our Internet service and electricity. It is true that we can trade on a cellphone these days but believe me when I say is NO FUN to do so when you are adjusting a multi-leg options position. I will certainly choose the comfort of my office chair in front of a good desktop anyday over trading on a cellphone using an app.

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