A practical guide to calculate your freelance hourly rate


Calculating your freelance rate or even negotiating your full time salary can be quite difficult. The more you have an idea of your outgoings, the more you will feel confident about demanding your rate.

A lot of freelancers pick an hourly rate that is similar to an equivalent full time salary. This is wise if you’re still in full time employment but unwise if you’re a full time freelancer.

Lets say for instance your hourly rate for full time employment is £15 per hour when you do the backward calculation – this is equivalent to earning £27,000 per annum.

You decide this will be your “full time” freelance rate – bad idea. Being a freelancer doesn’t guarantee a set number of hours per a month. The average work time for a full time employee in the UK is 150 hours per a month (7.5 hours a day or 37.5 hours a week) http://www.ft.com/fastft/2016/02/03/average-hours-worked-by-uk-full-timers-fell-in-2015/.

Seasoned freelancers will agree that the hours you work per month vary. It greatly depends on the demand for your services – this can include one off projects lasting a couple of hours, to projects spanning over a period of several months.

The best way to figure out what your hourly rate is will depend on your requirements afforded to you by choosing freelance.

Most people choose freelance to pick which projects they work on, be their own boss & escape from the 9am to 6pm rat race.

Use a common sense calculation

When I talk about being practical, the general idea is to use a common sense approach doing the calculation. Do not pick a random number off the top of your head or choose a number because it’s what somebody else charges.

You want to calculate your hourly rate based on your monthly expenditure to break even first. This means you should be in a position where you are able to pay for the necessities to support your current lifestyle – such as rent, food, Netflix, going out and so forth.

The common sense calculation in it’s basic form is

Monthly Outgoing / Monthly Working Hours

The first calculation – Monthly Outgoing

The first and foremost calculation to the common sense approach is to figure out exactly what your monthly outgoing is.

You can do this quite easily if you’re already in-tune with your finances but if you are struggling – look to your bank statement from the previous months. You will be able to spot patterns in outgoings.


Monthly Outgoing Amount
Rent £600
Food shop £200
Council Tax £140
Car – Petrol £120
Car – Road Tax £41
Car – Insurance £80
Take away £40
Netflix £8
Monthly Outgoings

The second calculation – Monthly Working Hours

Since you’re a freelancer – you are your own boss – great. You should have an idea of how many hours you want to work.

Lets say for instance you don’t want to quite work 7.5 hours per a day – you decide on 2 hours a day. In total that means you are willing to work 10 hours a week (I have excluded weekends).

10 hours a week multiplied by 4 weeks = 40 hours a month.

This is our Monthly Working Hours

Final calculation – Hourly Rate

Finally we have all the values required for a well informed calculated hourly rate. This is the absolute minimum you are going to charge to support your current lifestyle if you have guaranteed work of at least 40 hours a month.

Remember the common sense formula from earlier:

Monthly Outgoing / Monthly Working Hours

Lets use the values we’ve obtained previously to calculate exactly what our rate should be:

Monthly Outgoing Monthly Working Hours Hourly Rate
£1,229 40 £30.73


Using the common sense approach to calculate your freelance rate is a great place to start.

Some employers may say that your hourly rate is too expensive. The first thing to remember is that you have financial commitments – being a freelancer is just like running a business – it has to be worth your while. So stick to it.

If you feel your rate is too expensive

You can increase your Monthly Working Hours to reduce the hourly rate – this means you are willing to work a little longer to obtain the same amount of money.

You can negotiate further by outlining your ability compared to other developers and why you are worth your hourly rate.

If you feel it is too cheap

Then that’s even better – simply use the practical calculation as a baseline and add to it. I would recommend that you look at other freelancer’s online of similar skill set. Remember no two people are the same, you have a unique set of skills and that’s the distinction.