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Guide and Strategy in Calculating your Freelance Rate

Filipino | English Go Back to Course Outline I. Introduction In this blog, we will discuss the parameters that we need to cons...

Go Back to Course Outline

I. Introduction

In this blog, we will discuss the parameters that we need to consider when setting up a freelance rate and in the end, we will plot these parameters in a spreadsheet document to help us calculate a rate that will lead us to live a comfortable life.

II. Le’s start with some of the most basic questions. 

  1. How much do you need to survive and live a comfortable life? 
  2. What is your service worth to the client? 
  3. How much is the client willing to pay for your services? 
  4. But before that, we need to answer what will it require to live that life?

III. To determine our cost of living we have to factor in the following:

  1. Bills (electric, internet, water)
  2. Government mandatory contributions (tax, SSS, Pagibig, Philhealth)
  3. Health card
  4. Retirement fund
  5. Emergency/Medical fund (6x monthly salary)
  6. Fun and travel fund
  7. Insurance
  8. Make sure to factor in holidays, illness and times when the work volume is low. For example, some clients are on vacation in December.

III. How to come up with a rate for your services

  1. Before everything, remember that the freelance rate is more of an art than math.
    1. Freelancers don’t know how much to charge, while clients don’t know how much to pay. Oftentimes the first figure is always wrong.
  2. So the first step would be to research the market in your area.
    1. Compare and contrast the rate for your services.
    2. Get the rate for old and new freelancers and determine the range. You can use indeed.com as a reference for a fixed monthly rate.
      1. https://www.payscale.com/research/PH/Job=Virtual_Assistant/Hourly_Rate
      2. https://www.indeed.com.ph/salaries/virtual-assistant-Salaries
    3. For example, a VA would normally have a prevailing rate from $3 to $12. But it will really depend on the tasks and experience.
  3. In the simple formula, a freelancer rate would be:
    1. Rate = skills + experience + value
    2. The more skills and experience you have the higher the rate you can command.

IV. Things to remember when computing your rate

  1. Price yourself based on the value of your services to the client and not on the time that you will spend on the job.
    1. Aim too high and you’ll lose your client, choose low and you will end up with low pay but a high volume of work.
    2. For example, a client with an e-commerce shop is often willing to pay a premium price to update or fix something on their website because if it’s not working then they will not have any income at all.
  2. Don’t forget to incorporate time into your work like calls and meetings.
  3. Your rate should increase as you gain more experience, so keep increasing your rate at a reasonable price.
  4. Shift focus from time to value.
  5. Setting a rate is getting the balance between the right price for the value and skills while factoring the volume of work.

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