Setting your freelance day rate as a technical profile
Not your previous salary plus some margin, but a sum that adds up. The method to reach a rate you can defend.
The classic beginner mistake with freelance rates: dividing your old gross salary by twenty working days and adding a bit. That rate looks high but proves too low after a year, because it forgets everything that has to come out of it. The right method calculates backwards.
Step 1: start from what you want to keep
Start from the net monthly income you need, and add your new costs: social contributions, insurance, accountant, pension build-up, equipment and transport. Don't forget the replacement cost of what your employer used to pay: the car, the group insurance, the hospitalisation cover. That gives you what your business must generate per year.
Step 2: divide by realistic days
A year doesn't hold 260 billable days. Subtract holidays, public holidays, illness, training, administration and idle time between assignments, and you land on a considerably lower number. Divide your yearly amount by it and you have your floor rate: the amount below which freelancing makes you poorer than employment.
Step 3: position above your floor
The market decides the rest. Scarce specialisations, commissioning experience and willingness to travel push rates up; long, comfortable assignments close to home justify some margin below. Ask around in your field, and retest your rate with every assignment, because the market moves.
One thing never changes: clients don't pay a rate because your costs are high, but because you solve a problem that costs them more than your invoice. So defend your rate with what you deliver. And unsure what the market pays for your profile today? Ask us; we see the rates from both sides.
Frequently asked questions
Should I use different rates per client?
One base rate with reasoned deviations works best: somewhat above for short or urgent assignments and long commutes, possibly somewhat below for long assignments with certainty. Arbitrary differences come out sooner or later and damage your negotiating position.
When do I raise my rate?
Natural moments are the start of a new assignment and the yearly renewal of a running one. Announce it in time and substantiate it with what you've additionally mastered. If your agenda is full for months and you have to decline work, that's the clearest signal you're too cheap.
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