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How to Set Your Freelance Rate

Struggling to set the right freelance rate? Harvest helps you track billable and non-billable hours, providing insights to inform your rate-setting decisions.

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What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

$
Accounting for vacation, holidays, sick days
60%
Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.
$
Software, insurance, equipment, accounting, taxes beyond income tax, etc.
Your break-even rate $0
Recommended rate (+20% buffer) $0
Billable hours per week 0h
Equivalent daily rate $0

Start tracking your billable hours

Walk through the entire flow below. Start a timer, check your reports, and create a real invoice — all in three clicks.

Go ahead — start tracking!

One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

  • One-click timer from browser, desktop & mobile
  • Works inside Jira, Asana, Trello, GitHub & 50+ tools
  • Duration or start/end — your call
  • Day, week & calendar views to stay on top of it all
  • Friendly reminders so no hour gets left behind
Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
Blog calendar planning
1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

Understanding Billable vs. Non-Billable Hours

For freelancers, distinguishing between billable and non-billable hours is crucial for effective rate setting. Billable hours are those directly tied to client work, while non-billable hours include administrative tasks, marketing, and professional development. Industry research shows that most freelancers can only bill about 50-70% of their total working hours, with the rest spent on non-billable activities. This discrepancy highlights the need to set higher rates to compensate for non-billable time.

Harvest simplifies this process by helping freelancers track both billable and non-billable hours. By providing detailed insights into how your time is allocated, Harvest aids in understanding the true cost of your services. This information is key when calculating your rates, ensuring that both billable and non-billable time are adequately compensated, which prevents undervaluation of your work.

Calculating Your Freelance Rate

Setting your freelance rate involves more than just picking a number that feels right. It requires a thorough calculation based on your annual income goals, business expenses, and realistic billable hours. According to industry experts, freelancers should factor in all expenses, such as software subscriptions, insurance, and taxes, when determining their rates. Additionally, consider that freelancers typically only bill 5.5 out of an 8-hour workday due to non-billable tasks.

While Harvest does not directly calculate rates, it supports this process by tracking your time and expenses. This data helps you understand the financial aspects of your freelance business, enabling you to make informed decisions about your rates. By knowing your exact expenses and how your time is spent, you can set a rate that meets your financial goals and accommodates your non-billable hours.

Factoring Market Trends and Experience

Freelancers must consider market trends and personal experience when setting their rates. The average hourly rate for freelancers in North America reached $56 per hour, reflecting a consistent upward movement in freelance pricing. Experience significantly impacts rates, with seasoned freelancers earning an average of $50 per hour, while those with less than a year of experience earn about $26 per hour.

Harvest allows freelancers to set different billable rates for each project, which can be adjusted based on market demand and personal expertise. By tracking your hours and expenses, you gain insights into project profitability and can adjust your rates to reflect the value you provide. This adaptability ensures your rates remain competitive while aligning with your experience and market trends.

Choosing the Right Pricing Model

Deciding on a pricing model is a pivotal step in setting your freelance rate. Many freelancers are moving away from hourly fees to value-based pricing, which better reflects the expertise and outcomes delivered. Value-based pricing decouples income from hours worked, rewarding efficiency and expertise. This approach is becoming more popular as it aligns freelancer incentives with client success.

Harvest supports freelancers in tracking time and expenses, which is essential for understanding project scope and profitability. By analyzing this data, you can choose a pricing model that suits your business goals, whether it's project-based, value-based, or retainer. Harvest's insights help you determine which model maximizes your income while delivering value to your clients.

Set Your Freelance Rate with Harvest

See how Harvest helps track hours and expenses, offering insights to set effective freelance rates.

Harvest dashboard showing freelance rate insights.

How to Set Your Freelance Rate FAQs

  • Freelancers determine their hourly rates by calculating their desired annual income and dividing it by their realistic billable hours, factoring in all expenses. Most freelancers can bill about 50-70% of their time.

  • Billable hours are directly tied to client work and can be charged for, while non-billable hours include tasks like administration and marketing. Tracking both helps in setting accurate rates.

  • Value-based pricing is popular because it rewards expertise and outcomes rather than just hours worked. It aligns freelancer incentives with client success, offering a more sustainable income model.

  • Experience significantly impacts freelance rates. Those with over 10 years of experience can earn significantly more per hour compared to those new to the field, reflecting their expertise and market demand.

  • Harvest helps freelancers track billable and non-billable hours, providing insights into project profitability. This data supports informed rate-setting decisions by highlighting the true cost of services.

  • Freelancers can adjust their rates based on project complexity, client size, and market trends. Harvest allows setting custom rates for different projects, offering flexibility in pricing.

  • Common pitfalls include undervaluing work, letting clients dictate rates, and not accounting for non-billable hours. It's crucial to have a clear rate strategy and adjust rates as experience grows.