Type to search


Why You Shouldn’t Charge By The Hour as a Freelancer


The focus to increase your income typically pays off.

As a freelancer, one thing that may be a significant help to you in increasing your income is no longer seeing yourself as an hourly worker. While you may have stopped charging clients at an hourly rate, you may still think of yourself as a typical hourly worker. Charging by the hour is actually a critical mistake because you always seem to undercharge for your work. Interesting, right?

So, what’s the solution? It’s simple: stop charging by the hour. Let’s examine this a bit further, according to Global Resources reviews.

Why Thinking as an Hourly Worker Is a Poor Idea

Thinking in terms of hourly pay can actually do bad things for your state of mind. A lot of people use the hourly wages they’ve earned in the past and other employee wage benchmarks to decide how much to charge. This is not a good idea.

Comparing an employee’s hourly rate to your own freelancer rate is unequal. You have to account for things like self-employment taxes, health insurance, and the boatloads of time spent completing administrative tasks just to keep the business running.

In addition, a client doesn’t have to pay employee expenses for contractors. This is a significant saving they’re gaining from doing business with a freelancer. An hourly rate given to an employee factors in the benefits that the employee earns. Since freelancers do not get those same benefits, they should be paid more.

Despite this reasonable logic, some clients are surprised when you state an hourly rate that compensates you properly. The inability to come to an hourly rate agreement can cause a lot of problems.

Pexels Photo 970193

So, what should you do instead?

It’s important that you simply set a per project price and don’t reveal how much you work per hour. There is absolutely no need for a client to know what you charge hourly because they may have a preconceived notion about how much someone in your role should be earning.

For example, say you charge $150 per hour could make someone relatively uncomfortable. Instead of establishing an hourly rate, charging a flat $150 for writing a blog post without naming how much you charge per hour might be a better option.

In this case, you could easily be making $150 per hour. No one needs to know how many minutes or hours go into your work, and quite frankly it’s none of their business. The most important thing is that you’re delivering the product they need.

Sean Jacobson

I'm Sean, a former HR and business consultant providing you insights into the business world for Leader to Leader.

  • 1