how to set freelance pay rates

When I talk with people who want to be freelancers, I get asked many, many (MANY!) questions. One of the most common is:

How much should I charge?

When I talk with people who want to hire me as a freelancer, I get asked many, many (MANY!) questions. One of the most common is:

How much do you charge?

The answer to both questions is more complicated than you might think. Let’s talk a bit about what the going rates are, how you can set your own rates, how to negotiate your pay, and some ways to increase your rates as you advance in your career.

But first, the most important thing:

Get Paid by the Job

Always quote your prices based on a project rate.

If you’re a graphic designer, that means setting one rate for the full logo design project, booklet, or other task.

If you’re a writer or editor, that means charging by the word. Sometimes this means an actual per-word rate. Other times it means bidding on a job by estimating the final number of words and then multiplying that estimate by your per-word rate.

I recommend this for three reasons:

1. It Streamlines Your Process

Tracking hours sucks. It takes time you could use for better purposes, and it poses difficult questions. If you spent 40 minutes thinking and 20 actually writing, is that a full hour? Do you charge your client for bathroom breaks? What about a phone call where you talked business for 20 minutes and golf for 30?

2. It Values Your Knowledge and Skill

As a writer, you get paid for your expertise. Every client you have pays you a little for the time you spent actually writing, and the rest for the time you spent getting good at writing. Per-job billing reflects that better than payment per hour.

3. It Compensates You for Efficiency

Once you get your professional chops down, you’ll be writing quickly enough to justify making $150 to $200 per hour. Very few clients will sign off on that as a per-hour rate, but they’re perfectly happy paying $500 for a writing job that takes you 3-4 hours.

Some clients will still insist that you bill by the hour. If they do, reverse engineer it by figuring out how quickly you write and setting your hourly rate to match. But because I’m such a proponent of getting paid by the job/by the word, the rest of this discussion will be in terms of payment per word.

What Are Market Rates?

A general rule of thumb is that you can charge whatever the market will bear. But what does that mean?

There’s an average range of rates, called scale, that most people in your industry will charge—that doesn’t mean that they all charge the same rate, but that they’ll fall somewhere along the scale based on their personal overhead, expertise, length of time in the field, and so on.

This applies to just about every type of freelancing, from graphic design to writing to being a private chef. Here, we’ll focus on writing as an example, but you can apply these principles no matter what field you’re in—it’s only the pay ranges that will differ.

How much writing is worth varies wildly, but here’s a list of the most common ranges of scale.

Insulting (FREE)

Do not write for free. Do not write for “exposure.” The difference between a professional and a talented amateur is whether or not they insist on getting paid for their work. Be a professional. Get paid.

Note: The exception to this is when you’re doing marketing for a book or building your platform. In this case, you can consider writing for free under certain circumstances: guest-posting on a popular blog, writing lead magnet pieces for your email newsletter opt-ins, or writing content to give to your followers to keep them engaged.

Work for Trade (Varies)

Apart from platform-building exercises, this is the only exception to the “don’t write for free” rule.

Many writers got their first pro gigs by working in trade. For example, if your favorite bar needs a better website, you can write the copy in exchange for beer. Don’t do this for too long, but it’s a foot in the door method that can get you good clips and exposure.

Unacceptable (< 5 cents per word)

A lot of the less reputable shops offer this rate, and although it’s actual cash, it’s not enough cash to make a living. You can’t write enough at this rate to make a decent living, and if you try, you spend so much time writing you don’t have time to build your brand.

Accept these only as your very first assignments, and get out in no less than three months.

Beginning (5 to 10 cents per word)

You can make teacher-level wages if you work for this scale. There’s plenty of work available, and you can easily make $50 to $100 an hour doing it once you figure out how to write quickly. There’s a golden handcuffs risk here, though, since you’re making just enough money to get by but not enough to really live the dream. Stay here for a couple of years, but don’t stay here forever.

Journeyman (11 to 25 cents per word)

Most good trade magazines and major paying websites pay at this range, as do ghostwriting assignments from businesses and professionals. There isn’t as much work to go around as at the beginning level, but the repeat business is good. Clients who pay this much prefer to work with people they trust.

You should be writing at this level most of the time by three to five years into your freelance career.

Professional (25 cent to $1 per word)

Professional blogging, ghostwriting for consultants and the financial sector, national magazines, and the top websites occupy this category. Writing here is great, because you’re making six figures on the regular and have enough extra time to keep looking for this level of work. It also gives you enough cushion to regularly say “thanks, but no thanks” to offers that pay less.

This is the top of where you can expect your writing career to regularly land you, but it’s a good place to spend the bulk of your career.

Expert ($1 to $2 per word)

If you work hard and have talent, you can spend much of the latter half of your career demanding this rate. You’ll get it from the major glossy magazines, the very-highest-paying feature assignments from high-end websites, top-level ghost blogging, and ghostwriting for minor celebrities. You can also expect this wage from writing excellent ad copy and white papers.

Making $5,000 for writing 5,000 words is a pretty sweet gig, and one you should start applying for in the second half of your first writing decade. You won’t get these jobs all the time, but even one or two a year makes living the dream a reality.

Enterprise ($2 plus per word)

This is the realm of freshly funded startups, major corporations, elite direct mail, and the highest-paying magazines in the world. You’ll also see this rate for top-drawer ghostwriting for celebrities. Nobody writes exclusively at this level, but even a handful of 5,000-word assignments can make you expenses for the entire year. Never stop chasing this goal.

Your career should be an upward trajectory along these categories, until you’re doing most of your work in the Professional and Enterprise levels. You’ll slide back sometimes, and occasionally take a lower-paying gig because the topic or the person is close to your heart, but overall, move upward and onward year by year until you’re actually getting paid what your words are worth.

Setting Your Own Rates

Determining how much you get paid follows one of two paths, depending on which market you’re going for.

If you are writing for markets with set rates, you determine how much you get paid by submitting to the markets that pay what you feel you’re worth. If you want 10 cents per word, pitch magazines that pay 10 cents or more per word. Don’t write for markets that pay less than you want to make, unless you have a compelling reason to do so.

If you are writing for clients with flexible rates, ask for what you think you’re worth. I personally mention a price that’s 150% of what I will accept, then offer 125% with discounts like “for the size of the contract” or “because I’m fascinated by the topic anyway.” Usually I make at least what I hoped to make.

If you apply these strategies to the knowledge above, you can take control of your rates and thus control of your writing career.

How to Negotiate Your Rates

There are two other things you need to know about when making decisions about how much you should charge.

The Little Brother Technique

This is a negotiating technique I use on a regular basis when people ask about how much I charge. It works like this:

CLIENT: “How much will this cost me?”

ME: “I like to make (amount of money). However, I mentor a few very talented younger writers. If I’m not within your budget, I can connect you with one of them. You’ll get solid work, with a little oversight from me, and pay about 60% of what I charge.”

I have never, not even one time, had a client opt to go with my “little brother” when I offer this. They all want the professional who’s so good at his job that he mentors other professionals. Even if they did go with one of my connections, I charge finders fees when I send out work, so I’d still get paid something.

Don’t lie here. If you’re not already mentoring somebody, start this week. Everybody knows someone who’s a little further behind on the path. Go teach them what you know. It will improve your writing.

Your Annual Raise

Working for an employer, you’ll get an evaluation and related raise about once each year. You should treat yourself with the same respect. Every year, you should increase your rates. Do this in one of two ways:

  • Let each of your clients know that as of September, your rates are rising by X cents per word. Don’t justify it, just send out the email and reflect it on your next invoices. Most understand that rates go up in life, and a 5% or even 10% increase isn’t enough to complain about.
  • Leave existing contracts as they are, but charge the next client or assignment 10% to 20% more. As old clients fade, this provides you with a steady, annual raise.

It’s Really that Simple…

…though I admit it’s not as easy as I might have made it all sound. Now get out there, charge what you’re worth, deliver excellent work, and charge a little more next time.

Before you know it, you’ll be making coder wages for writing in the language you like best.


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