How to Get Started Freelancing: Set Your Freelance Rates

The Evolution of Our Rates

We started out by bidding very low on jobs on Guru.com. To be honest, most of the reason we bid so low was because we didn’t yet have a sense of our own worth. Yes, we did the $5 for 500 word articles for a while. There were both positive and negative consequences.

In the plus column, we were able to get some experience, to earn enough money to at least feel like we were legitimate, and our rank improved on Guru. In short, there was really nowhere to go but up. On the downside, however, we had to do some crappy projects for crappy employers at crappy pay. The people who are paying you a penny a word are also the ones who are the hardest to please. (Which makes sense when you realize that they obviously don’t value what you do.) In addition, these are the people who are the most likely to not pay you. The only thing worse than doing crappy projects for crappy pay is doing crappy projects for NO pay.

Ask for More Money

It only took as a couple of months to start asking for more and more money. We didn’t get as many jobs at first, but that didn’t matter so much, as you don’t need as many gigs when you’re charging three times as much for each of them. Over the course of time, we continued to raise our rates. Sometimes it worked for us, and sometimes it didn’t. But using this slow-and-steady approach made sense for our style. The more confident we got, the more we asked. Of course, that has to be tempered with what the market will bear. Just because I think I should get .50 a word for web content doesn’t mean anyone is willing to pay it. (For a little peek at one of our rate-raising experiments, check out “How to Charge More as a Freelancer.”)

If you’re not sure how much you really feel comfortable charging, then try bidding on different jobs at different rates. If you’re getting bites at the higher rate, then you should definitely consider raising your regular rates to that point. Meanwhile, you’ll hopefully still be getting work at the lower rate to tide you over as you’re experimenting. Remember, when I say “lower rate,” I’m not advocating slaving away for next-to-nothing. We are living proof that people will pay more than you expect. Go ahead and test that theory yourself, and you may be pleasantly surprised.

You Don’t Get to Keep All of Your Money

One last word of advice. Remember that as a freelancer, you are going to have to pay about twice the amount of tax as you would working for someone else. That’s because you have to contribute the part that would normally be paid by an employer, as well as the part you would have been paying yourself. That means that if you are getting $15 for an article, you are likely to have to pay at least $5 in taxes. Keep this in mind when setting your freelance rates.

When all is said and done, setting your freelance rates really is a personal decision. The best I can do is to recommend that you don’t undersell yourself as much as we did in the beginning. It can be a great ego boost to get those first few jobs at $5 a piece, but it is such a colossal let-down when you don’t get paid or you realize that you’ve actually only made $2.50 an hour for your hard work.

So, I’d like to open up the comments section to those of you who either have experience to share or questions to ask. What’s on your mind, folks?