About to go freelance? How much should you charge?

Checking time on the job

Long before venturing out on your own as a freelance or contractor you need to work out how much you will charge.

Charge too little and you won’t maximise your earnings. You could create a false perception of your worth and struggle to charge more. Set your prices too high and you’ll put off potential customers.

Understand rates

Websites such as yourrate provide an online tool that allows you to enter the amount you want to earn each year, hours per week you plan to bill for and weeks’ holiday you plan to take. It then automatically calculates an hourly rate.

But, the amount you want to earn and the amount you actually can earn could be entirely different. You could underestimate or overestimate your value.

The Micro Business Hub website provides a more complex online tool aimed for would-be self-employed freelances wanting to work out their hourly rate. Crucially, it encourages users to calculate their costs before entering their desired income to find out how much they have to earn (turnover) and charge for an hour’s work.

Market rate

A critical factor, of course, is the ‘going rate’ or ‘market rate’. This is the generally accepted level of pay for your role in your given sector and location. If necessary, contact your trade association to find out freelance rates. Also look at websites that offer freelance work and freelance forums.

A word of caution: some customers will try to pay less than the going rate – especially if competition for work is strong. It’s always wise to get confirmation in writing of pay in advance and work required. Then you can decide whether or not to take the work if pay is less than you want to charge. If you accept, you may never get the higher rate from that customer. It’s better to leave room to negotiate than to sell yourself too cheaply.


Another factor could be location, because freelances in some parts of the country can charge more than other freelances doing exactly the same job elsewhere. According to accounting firm Crunch, the national average day rate in Q3 2015 was £305, yet in the North East the figure was just £225, compared to £315 a day in Greater London. Your experience, depth and currency of knowledge will also determine the value you offer and price you’ll be able to charge.

Earning potential

In her Forbes.com piece – Freelancers, Here’s How To Set Your Rates – freelance journalist Laura Shin writes, ‘Don’t look for the answer from others. Figure it out from your own numbers.’

She says the three key factors that affect how much you can or should charge are:


  • your budget (i.e., how much you need to live)
  • ‘how good you are at what you do/the price you can fetch’
  • ‘and how much time you have’


Time, Shin says, is the most fixed variable. ‘Squander [your] time on low-paying gigs, and you won’t earn a lot,’ she cautions.

Shin recommends drawing up a business plan and setting quarterly, monthly or even weekly earnings goals. If you’re a fast worker, she advises negotiating a flat fee rather than hourly/daily rate. She also warns that while regular work for the same clients can provide security, it can prevent you from earning more elsewhere.

Freelance rates: the golden rules


  • Calculate your costs. Then you can work out if you’re making enough profit once your expenses have been paid.
  • Know how much others charge. Find out the going rate. Speak to your trade association, look on forums and freelance websites, network and talk to other freelances.
  • Evaluate your skills and knowledge. Know how much value you offer – it might enable you to charge more.
  • Have a pricing structure. Some customers might willingly pay more than others.
  • Build in some flexibility. Then you can offer a slight discount if you really need the work.
  • Know how low you will go. Walk away if any less is offered.
  • Find out all the details. Otherwise you risk providing a quote you later regret.
  • Be firm when negotiating. It’s in prospective clients’ interest to try to pin you back on price.
  • Decide on the best deal. Being paid for a project might be better than by the hour or day if you are quick.
  • Bear VAT in mind. If you plan to add it, you might be too expensive for clients who aren’t VAT registered.


The views, opinions and positions expressed within the British Gas Business Blog are those of the author alone and do not represent those of British Gas. The accuracy, completeness and validity of any statements made within this blog are not guaranteed. British Gas accepts no liability for any errors, omissions or representations. The copyright in the content within the British Gas Business Blog belongs to the authors of such content and any liability with regards to infringement of intellectual property rights remains with them. For more information about the mix of fuels used to generate our electricity simply visit britishgas.co.uk/business/about-us. You can find information about how to make a complaint at britishgas.co.uk/business/complaints.