Freelance rate calculator
The same project can pay very different money depending on how you price it, and the gap shows up only once the extra hours start piling on. Enter your target hourly rate, your estimate for the project, how far projects usually overrun and what the result is worth to the client, and this calculator prices the job hourly, by the day, at a fixed price and on value. It then shows the effective hourly rate each one pays, so you can pick the model that protects your time best.
Effective hourly rate by pricing model
What each model pays for every hour you actually spend, once the usual overrun is counted. Your target rate is shown for reference.
Fixed price vs overrun
Your fixed-price quote stays the same while the real hours change. This is the risk you take on when you quote a fixed price.
| Overrun | Real hours | Hourly billing earns | Fixed price earns | Fixed price per hour |
|---|
How each pricing model is compared
Every model is priced from the same estimate. The difference is who pays for the extra hours when a project runs over: the client under hourly and day rates, you under fixed and value pricing.
Likely real hours
Your estimate plus your usual overrun.
real hours = estimate × (1 + overrun)
Hourly
Every real hour is billed at your rate.
hourly = rate × real hours
Day rate
Real hours rounded up to whole days, at a discounted day rate.
day rate = rate × hours per day × (1 − discount)
Fixed price
Quoted on the estimate plus a buffer, then paid the same however long it takes.
fixed = rate × estimate × (1 + buffer)
Value-based
A share of what the result is worth to the client.
value price = client value × your share
Effective rate
Each price divided by the real hours.
effective rate = price ÷ real hours
Freelance pricing questions
Should I charge hourly or a fixed price?
Hourly protects you from scope creep, because every extra hour is paid. A fixed price rewards you for working fast and is easier for clients to approve, but every extra hour comes out of your pocket. If you can estimate a project well and add a buffer, fixed pricing usually pays more per hour.
What is an effective hourly rate?
It is what you actually earned divided by the hours you actually spent. A $3,000 fixed-price project you expected to take 30 hours pays $100 an hour, but if it takes 45 hours it only paid about $67. The calculator works this out for every pricing model on the same project.
How much buffer should I add to a fixed price?
Look at past projects and compare estimated hours with actual hours. Many freelancers run 20 to 40 percent over their first estimate. A buffer at least as big as your usual overrun keeps your effective rate where you want it.
What is value-based pricing?
You price the project on what it is worth to the client rather than on your hours. If a new checkout flow will add $100,000 a year in sales, charging 10 percent of the first year's value is $10,000, however long it takes. It works best when you can measure the outcome.
How do I set a day rate?
Multiply your hourly rate by the hours in a working day, then decide whether to offer a small discount for booking whole days. Day rates suit work that fills the day, such as workshops or on-site support. Partial days usually get rounded up, which protects your time.
What hourly rate should I start from?
Use the rate you need to hit your income goal after taxes, expenses and unbilled time. Our freelance hourly rate calculator works that out. This tool then shows which way of pricing a project gets you closest to it, or above it.