How to Price Your Freelance Services Without Undervaluing Yourself
Learn proven strategies for pricing freelance work, from calculating your minimum rate to presenting value-based packages that clients happily pay for.
Introduction
Pricing is where most freelancers leave money on the table. You either quote too low and resent the work, or quote too high and hear crickets. The sweet spot—where clients happily pay and you feel valued—requires a system, not guesswork.
This guide walks you through calculating your floor rate, building value-based packages, and presenting pricing in ways that make clients say yes without haggling.
Calculate Your Minimum Viable Rate
Before you can price strategically, you need to know your floor—the minimum you can charge and still run a sustainable business.
The Formula
Minimum Hourly Rate = (Annual Expenses + Desired Income + Taxes) ÷ Billable Hours
Let's break it down:
- Annual Expenses: Rent, software, equipment, insurance, healthcare—everything it costs to run your business
- Desired Income: What you want to take home after expenses
- Taxes: Typically 25-35% of your gross income as a self-employed professional
- Billable Hours: Be realistic—most freelancers bill 20-25 hours per week, not 40
Example Calculation
- Expenses: $15,000/year
- Desired income: $80,000/year
- Taxes (30%): $28,500
- Total needed: $123,500
- Billable hours (22/week × 48 weeks): 1,056 hours
- Minimum rate: $117/hour
This is your floor. Never go below it.
Move From Hourly to Value-Based Pricing
Hourly rates have a ceiling: there are only so many hours in a week. Value-based pricing ties your fee to the outcome you create, not the time you spend.
When to Use Value-Based Pricing
- The client will make measurable money from your work
- You have a repeatable process that delivers consistent results
- You can scope the project clearly upfront
How to Calculate Value-Based Prices
Ask yourself: What is this worth to the client?
- A website redesign that increases conversions by 20% on $500k revenue = $100k value
- Charging $15k for that project is a bargain for the client and great for you
The 10% Rule
A reasonable starting point: charge 10% of the value you create. If your work will generate $50k in additional revenue, $5k is easy to justify.
Structure Packages That Sell Themselves
Packages beat custom quotes every time. They reduce decision fatigue, anchor expectations, and let you standardize your delivery.
The Three-Tier Model
Offer three options at different price points:
- Starter — Minimum viable deliverable, lowest price, fastest turnaround
- Standard — Your recommended option, best value, most popular
- Premium — Full-service, highest price, includes extras and priority
Why Three Options Work
- Anchoring: The premium option makes the standard feel reasonable
- Self-selection: Clients choose based on their needs and budget
- Upsell path: Easy to move clients up from starter to standard
Example Package Structure
| Package | Price | Includes |
|---|---|---|
| Starter | $2,500 | 5-page website, 2 revision rounds |
| Standard | $5,000 | 10-page website, SEO setup, 3 revisions |
| Premium | $10,000 | Full site + copywriting + ongoing support |
Present Pricing With Confidence
How you present pricing matters as much as the number itself.
Never Apologize for Your Rates
Phrases like "I know it's expensive, but..." undermine your value before the client even responds. State your price clearly and wait.
Use Proposals, Not Emails
A structured proposal with context, scope, and pricing feels professional. An email with a number feels like a guess. Tools like Manager List let you present packages interactively, so clients see the value before they see the price.
Offer Payment Options
- Deposits: 50% upfront, 50% on completion
- Milestones: Split into 3-4 payments tied to deliverables
- Retainers: Monthly payments for ongoing work
Payment flexibility removes friction without lowering your rate.
Conclusion
Pricing isn't about finding the "right" number—it's about building a system that protects your floor, captures value, and presents options clearly.
Start with your minimum viable rate so you never undercharge. Move toward value-based pricing as you build confidence and case studies. Structure packages that make decisions easy. And present your pricing professionally, without apology.
The freelancers who earn the most aren't always the most talented—they're the ones who understand their value and communicate it clearly.
Frequently Asked Questions
- How do I calculate my freelance hourly rate?
- Add your annual expenses, desired income, and taxes, then divide by your realistic billable hours (typically 1,000-1,200 per year). This gives you your minimum viable rate—the floor you should never go below.
- Should I charge hourly or per project?
- Project-based pricing is usually better because it ties your fee to value, not time. Hourly rates penalize efficiency and cap your earning potential. Use hourly only for undefined scope or ongoing advisory work.
- How do I raise my rates with existing clients?
- Give advance notice (30-60 days), explain the value you provide, and offer to grandfather their current rate for a limited time. Most clients expect rates to increase over time.