Pricing your services as a freelancer

Our team often comes into contact with employees who want to make the leap to freelancing as their main occupation. An important part of that process is setting the right price for their services

Calculating your rate as a freelancer is not always easy and depends on several factors. In this article, we take a closer look at how to determine your rate as a freelancer.

Influencing factors

Besides the sector and region you work in, there are a lot of factors that affect what prices you can ask as a freelancer.

For instance, a large company with multiple offices will be able to allocate more budget to a project than a start-up. Your experience as a freelancer and how you sell yourself will also determine whether or not a client will agree to the proposed rate.

Step 1: cost structure

To determine a good rate, it is important to know your costs first. These are all the costs you incur as a freelancer to provide your services. Think of costs for materials, equipment, transport, insurance and so on.

It is also important to take into account costs you have to incur to keep your business running, such as office rental or accountant fees. You usually cannot pass these on directly to the client, but they do have a big impact on your cash flow.

Step 2: determine your desired income

After you have built your cost structure, you can determine what income you need to make a living from your activities. You can base this desired income on your current salary.

Keep in mind that as a freelancer, you will also need to save for your pension and social security, since as a self-employed person, you have to take care of this yourself.

An example

Say you want to earn 25.000 euros net per year (2.083 euros per month) as a freelancer. To achieve this, you would need to invoice around 50.000 euros. If you add in an additional 8.000 euros in ancillary costs, you arrive at a gross annual turnover of 58.000 euros. Suppose you work 35 hours a week for 48 weeks a year, then you would need a minimum hourly rate of 32.4 euros to achieve your desired income.

Tailor-made simulation

To help you with this issue, we have developed a simulation tool that shows, based on your current salary, how much you should charge as a freelancer. Feel free to get in touch and we will provide you with the questionnaire!

Step 3a: determine your hourly rate

The most obvious option is to work on an hourly rate. The hourly rate you can charge as a freelancer depends on several factors, such as your experience, the complexity of the work and the industry you operate in.

It is important to know what the average rates are within your sector so that you can respond accordingly. On average, the rates of freelancers in Belgium vary between 40 and 100 euros per hour. Keep in mind that your rate should not be too high, otherwise you will bring in fewer assignments, but also not too low, otherwise you run the risk of being underpaid.

Beware! An hourly rate that is too low can be a deterrent, as it gives the client the perception that your work will not be of high quality.

Step 3b: set your rate per project

Some freelancers do not work on an hourly rate, but charge a flat fee per project. This can be useful if your work cannot be estimated by the hour or if your client prefers this. Again, it is important to consider your costs and desired income so that you can charge a fair rate.

Ensure transparency in expenses

Besides your rate per hour or per project, you may have to charge additional costs, such as travel and accommodation. Make sure you map out these costs properly and communicate them clearly to your clients.

Conclusion

When determining your pricing, you always start by building up your cost structure. Based on that, you can calculate how much income you need to pay your fixed costs on the one hand, and leave a wage you can live on on the other.

Afterwards, you decide whether you want to work with a rate per hour, per project, or some other pricing scheme. Finally, when determining your rate, you should always consider influencing factors, such as the type of client you work for and your experience as a freelancer.

And now?

We would like to discuss your situation in detail! Based on your input in our survey, we will schedule a meeting in which we will dive into your figures.