Most freelancers undercharge, and it's rarely because their work isn't good enough. It's because they price like an employee — take a monthly salary they'd like, divide by working hours, done. That maths quietly bankrupts you.
Why "salary ÷ hours" is wrong
As an employee, someone else covers your holidays, sick days, software, taxes, downtime between projects, and the hours you spend on admin and finding clients. As a freelancer, you pay for all of it — out of your billable hours, which are far fewer than your working hours.
A rough reality check: of a 40-hour week, you might bill 20–25 hours. The rest goes to admin, sales, learning and life. So your rate has to cover the whole business in the hours you actually invoice.
A simple way to find a floor
- Decide the annual income you actually want to take home.
- Add your business costs (software, hardware, insurance, taxes set aside).
- Divide by your realistic billable hours per year — not total hours.
That number is your floor, the rate below which the work isn't worth doing. Your market rate is usually higher — this just stops you going under it.
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UseOneApp creates the invoice, tracks the due date and keeps it next to the client — all in one place. Free forever for one project.
Try it free →How to raise your rates
- Raise them on new clients first. No awkward conversation, immediate effect.
- Give existing clients notice ("from next quarter my rate will be…"). Most stay; the ones who leave were the price-sensitive ones anyway.
- Raise after a win. Just delivered great results? That's the moment your value is most visible.
The quiet signal of low prices
Charging too little doesn't just hurt your income — it changes how clients treat you. Underpriced work attracts the clients who haggle the most and respect boundaries the least. A fair price filters for the clients you actually want.