Start With Your Target Income
Most freelancers price themselves out of poverty — they take their last salary, divide by 52 weeks, then 40 hours, and call that their rate. This is wrong. Your freelance rate must be significantly higher than your equivalent employee salary to account for everything that disappears when you go independent: paid leave, sick days, pension contributions, employer taxes, equipment, insurance, and the time you spend marketing instead of billing.
The formula: (Annual income target + Business expenses) ÷ Billable hours = Your minimum hourly rate.
Add a Profit Margin
The rate above is your floor — what you need to survive. Add 20%–40% on top as your profit margin to build a buffer for slow months, fund reinvestment in your business, and reflect the market rate for your skills. Research what others in your niche charge. Being 20% below market often means you are 50% less profitable than you should be.
Adjust for Your Niche and Experience
Rates in 2026 vary enormously by niche and geography. A senior software developer in San Francisco commands $150–$250/hour. A copywriter in London might charge £60–£120. A marketing consultant in South Africa might charge R800–R2,500/hour. Specialisation, portfolio strength, and demand all influence where in that range you sit.
Key Takeaways
- Don't rely on gut feeling — use numbers and a clear formula
- Review and adjust your figures at least once per year as costs and market rates change
- Use our free calculator above to apply these concepts to your specific situation
- Compare your results against industry benchmarks and adjust accordingly