How to set your first hourly freelance rate?

How to set your first hourly freelance rate?

You may use this as your starting guide to set your first hourly rate.

Based on your salary job

Pricing is a complex skill. The first thing you need to know is your cost.

I’ll show how the calculation works if you just get started in freelance and wanna transition from full-time or as a side income.

Example: Your salary from full-time work - RM 4,000Time consume - 5 days 6 hour/day 4 weeks = 120 hours

Hourly rate - RM 4000/120 = RM 33

You can use RM 33 as your base rate.

Cool. Now you know how much the cost to hire you.

To charge your client, just a markup or profit into it. Let’s say I want to have a 20% profit.

1.2 * RM 33 = RM 39.60 = RM 40

If needed, you may add markup for your uncertainty - sick, holiday.

Let’s say another 20%

1.2 * 40 = RM 48

Its easier to come up with a fixed price since you already know the cost.

You want to add a markup if you another cost that includes in your service.

You may use this figure to charge your fixed price project. Get a rough estimate time to complete multiply by your rate. Now, you have a cost to produce the service 👍.

Base on target annual income

For example, I want to earn RM 70,000 per year as a freelancer.

Number of working week per year

  • 48 weeks
  • 5 day/week
  • 5 hour/day

Total hour: 48  * 5 *  5 = 1200 hours

Hourly rate: 70000 / 1250 = RM 58

Optional: Add 20% profit margin to your hourly rate -

1.2 * RM 58 = RM 69.60 = RM 70/hour

Quick tips: Increase your rate if you’ve fully booked. It’s a good indicator that your price is lower than your value.

There are several ways to set your first hourly freelance rate, and there is no right answer. At the end of the day, as long the client able to fulfil your hourly rate.


Supply vs Demand.

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