Business & Entrepreneurship
How to Set Rates as a New Freelancer
Your first rate sets the tone for your entire freelance career. Here's how to price yourself without underselling or pricing yourself out before you start.
I charged $15 an hour for my first freelance project. I thought I was being realistic. I had no portfolio, no track record, no business. Surely I should start low and work my way up, right?
That client still contacts me sometimes. They never want to pay more than $15 an hour. Neither does anyone they’ve referred me to.
That wasn’t humility. That was setting a ceiling I’d spend years trying to break through.
Your first rate doesn’t just cover that one project. It shapes how you see yourself as a freelancer. It signals to clients what you believe you’re worth. And it becomes the anchor that every future rate negotiation pivots around.
So let’s get this right from the start.
Start with your actual costs, not your feelings
Most new freelancers skip this step. They go straight to “what do other people charge?” or “what would feel good?” and miss the one number that matters: what do you actually need to make?
Break down your real numbers. How much do you need to earn each month to cover rent, food, insurance, taxes, software, and everything else? Write it down. Then divide by the number of billable hours you can realistically work per week.
If you need $3,000 a month and you can work 30 billable hours per week for 48 weeks a year (accounting for holidays and slow periods), that’s roughly 1,440 billable hours. Your floor is about $21 an hour.
But that’s just survival. That’s not profit. That’s not room for growth. So add a buffer. At least 20-30% more. For taxes, business expenses, and the fact that not every hour you work is billable.
Now you have a real number. Not a guess. Not a hope. A number based on your actual life.
Know your skill level, not your confidence
This is where the story-telling matters. When I first started freelancing, I was terrified I’d overcharge and lose clients. So I told myself my work wasn’t “good enough” to cost more. But here’s the thing: my work was fine. I was just inexperienced.
There’s a difference. Inexperienced doesn’t mean worthless.
Inventory what you actually know. Can you do the work? Can you deliver something useful? Can you handle client communication and revisions? If yes, you’re not an amateur charity project. You’re an early-stage professional.
Rate tiers don’t need to be “beginner, intermediate, expert.” They’re usually just “I can do this” and “I can’t.” If you’re in the “can do this” category, you’re already above the $5-per-hour gig economy crowd.
New freelancers often slot themselves into one of two camps: severely underpriced (because they’re terrified), or naively overpriced (because they don’t know what they don’t know). Neither works. You want the middle: “I can do this competently, so here’s what it costs.”
Build your opening rate on demand, not supply
You don’t yet know if your rates are right. You’ll find out through actual clients.
Set your rate assuming you’ll get traction. If you price at $18 an hour because you think nobody will hire you at $25, you’ll become a self-fulfilling prophecy. You’ll undercut your own value before anyone else gets a chance to evaluate it.
Instead, price at what feels slightly uncomfortable but defensible. For most new freelancers entering a skilled field, that’s somewhere between $25-50 an hour, depending on the type of work. If you’re a designer, writer, developer, consultant. You’re not $15 an hour. You’re not even close.
Why? Because a client hiring you is taking a risk. They could hire someone cheaper. The fact that they’re considering you means you’re offering something. Even if it’s just being willing to work on short notice, or being genuinely responsive, or having even one relevant success story.
Use that leverage.
Your first client is not your lowest rate
This is crucial. The psychological traps I see most often:
“I’ll charge less for my first client to build portfolio and get a reference.” You will build a portfolio. And you’ll get a reference. But that client will become your reference point, and future clients will haggle you down to match what that first person paid.
Instead: charge your actual rate for your first client. They get your best work. They get your full attention. They should pay for that.
“I’ll do this project at a discount because the scope is small.” Scope isn’t the same as price. A small project might take you 10 hours or 2 hours depending on the skill it requires. Price based on the complexity and your skill level, not the outcome size.
“I’ll negotiate down if they ask.” You don’t know if they’ll ask. Have your rate ready before the conversation. Say it clearly. See what they say back. Only then do you decide whether to move.
The reality check: can you say no?
Here’s the part nobody talks about: your rate only matters if you’re willing to turn clients away.
If you price at $40/hour but you’ll take $20 because you’re scared, you don’t have a rate. You have a wishful number you tell yourself. The market sees your actual floor, which is whatever you’ll accept.
Set a minimum and lock it in. This is the number below which you don’t negotiate. Not because you’re stubborn. Because going below it doesn’t make sense for your business.
When I finally said “no” to a client below my rate. Actually walked away instead of negotiating. My entire business shifted. Suddenly the people I was attracting were taking me seriously. The projects started improving. The atmosphere changed.
You don’t need many clients. You need the right clients. And the right clients won’t be shopping for the cheapest option.
Adjust once you have data
Your opening rate doesn’t need to be your forever rate. But don’t change it based on fear or frustration. Change it based on what’s actually happening.
After your first 3-5 projects, assess: Are clients pushing back hard on price? Are you overbooked? Underutilized? Are your favorite clients in the higher or lower price range? What did you actually deliver relative to what you charged?
If you’re overbooked and everyone’s happy, raise your rate. If clients are consistently unhappy about price but the work is good, you might be in the right range and just attracting price-shoppers. In which case, you’re actually fine. If clients are delighted and things feel easy, raise your rate.
But don’t adjust your first rate based on imposter syndrome or competition anxiety. Adjust it based on reality.
Your first move
You need a number for your next potential client. Not a range. A number.
Take your monthly income requirement. Divide by billable hours. Add 25%. That’s your opening rate.
Write it down. Tell a trusted friend. Sleep on it. If it still feels slightly terrifying when you wake up, it’s probably right.
Then find your first client at that rate. Not cheaper. Not discounted. At that rate.
Everything else follows from getting this decision right.
If you’re still wrestling with pricing confidence, read how to price your work without apologizing. It digs deeper into owning your rates. You might also want the uncomfortable math of freelance hourly rates to understand how your rate compounds over time, and how to raise your rates without losing clients for when you’re ready to move beyond your first-time pricing.