How To Negotiate Freelance Rates: Charge Your Worth

If money conversations give you the ick, talking about how to negotiate your freelance rates may not be your favorite topic. But, it’s an essential aspect of being an independent professional, so like it or not, you will need to learn how to do it—and do it well.

As an independent professional, you’re now a small business owner. It’s your job to attract clients, do the work, and charge them what you’re worth. While money talks may make you uncomfortable, learning how to negotiate rates is a necessary skill on the road to building your business.

In this guide, we’ll cover how to arrive at a rate that makes you feel good and is fair for you and your clients. We’ll share seven key negotiation tactics and strategies to help you nail the negotiation process and come out feeling like a winner.

Ready to learn how to charge your worth? Let’s get started.

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Start by researching rates

What is a fair freelance rate for your services? Most freelancers—especially newbies—feel stumped by this. Questions like “Should you set an hourly rate and what should it be?” or “What should you charge for an entire project?” can feel overwhelming.

You may have a rough figure in mind but you have no idea if it’s enough, too much, too little, or just completely delusional. So what do you do to arrive at a fair rate?

Research the market, of course. What a freelance writer charges may be completely different from a data analyst’s rate, which will be entirely different from a freelance photographer’s rate. You’ll need to get an understanding of what others are charging for similar roles and projects.

This research will also help you figure out what your absolute minimum rate should be and then, as the saying goes, the only place to go is up.

Step 1: Research your competitors

So the first step of your search process is information gathering. If you know anyone in your line of work, start by talking to them to get an idea of what the average rates are currently.

You can also look up salary data for full-time jobs on LinkedIn or other job search sites, check out rates on freelancers’ sites, or even ask in online communities for freelancers or social media groups.

Remember to keep your skill levels in mind. If you’re new to the job, you may charge lower rates than someone with more expertise in your field.

You may also find these resources helpful for more insights:

• How Much Can Freelancers Make?
• 15 of the Best, Highest-Paying Freelance Jobs

Step 2: Determine your minimum acceptable rate

Once you’ve done your research, think about your minimum acceptable rate (MAR) i.e., the lowest rate you’d be willing to accept for your work.

This rate should, of course, factor in your skills, expertise, and experience. You may also need to consider:

• Your living expenses
• Various expenses for running your freelance business, such as internet, electricity, software, coworking space, etc.
• Income tax and business registration fees

The Freelance Rate Calculator is a helpful starting point to help figure out how much you need to charge your clients based on the expenses you have.

Growth marketing consultant Dan Siepen’s advice is to “provide rates that cover work that you do in your non-billable hours too, such as your personal education and upskilling, business admin tasks like invoicing and tax, etc.

“I’ve also learned to take calls and lead generation efforts with prospects into account. Not all of these calls lead to paid work so you certainly need to consider that as well.”

Next, set your rates

With the research out of the way, your next question is probably going to be “How should I set my freelance rate?”

Siepen shared his approach: “I have an ‘ideal’ number in mind to make per year. So I always work back from that number to work out what my ideal baseline rate is for engaging clients.”

By now you should have an idea of your minimum acceptable rate. To arrive at your final number, also consider:

• Your level of expertise
• The years of experience you have
• The scope of work and any revisions that may be needed
• The type of client

Remember that while your MAR may remain fixed, you’re free to change the rate you offer each client dependent on the above factors. You may also start out with a slightly lower rate to attract more clients and gradually increase your rate as you gather more skills and experience. In your proposal, you can add a scheduled rate increase for hourly contracts on Upwork.

Siepen has learned that his own niche expertise is valuable for clients and factors this into his rate. “Due to having deeper growth marketing experience in certain industries over others, I know the baseline KPI/metric expectations my clients usually have around their marketing results. I use my expertise in this area to charge higher rates, as I believe this industry knowledge is invaluable for the companies I work with.”

For more advice, check out our guide on how to set your freelance rate.

Fixed-price vs. hourly contracts

As you start thinking about your freelance rates, you also want to consider whether you want to charge by the hour or work only on fixed-rate projects. Each has its pros and cons. Some types of work are better billed hourly while others are better suited for project-based rates.

Hourly contracts are helpful when there are various tasks to complete. Instead of trying to figure out how much time each individual job will take, you can simply track your hours spent working overall. It helps ensure you get paid for all the time you spend on work—even meetings. The downside is that as you learn to work faster, you may earn less.

Many clients like to hire freelancers by project instead. They pay flat project rates for your services and know exactly what they're paying—no surprises. As a freelancer, you may earn more by charging a flat rate for certain projects, especially as you gain experience and grow more efficient.

For content writer Sanketee Kher, hourly rates are “a big no-no” after some mistakes in her early days as a freelancer. She said, “I prefer a monthly retainer when it’s a long-term client, but I usually start off with per-word pricing since most clients are comfortable with this.”

Your rates may change from project to project, depending on the requirements and scope of the project. If you have a set hourly rate, you can determine how much to charge for a project by estimating how long it will take you to complete. On Upwork, you also have the option to add a scheduled rate increase in your proposals. Choose how often, and how much of an increase you want. The client has the option to accept it or change the term if they choose to send you an offer.

If you work with clients on Upwork, you may come across both types of contracts. The graphic below will help you understand how clients may decide between setting up a project with a fixed price vs. an hourly contract.

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Pro negotiation tip: Client communication is key

Great communication is the glue that holds any relationship together. Working relationships are no different.

Before you go into the negotiation process, practice communicating your proposal and your rates concisely and with confidence. Remember you must be clear about exactly what you’re asking for, so state exact figures and not just a range.

If you’re pitching to your client via a video call, practice your selling points. If you’re pitching via email, keep it concise and to the point. Don’t ramble on and risk the main message getting lost. And remember, regardless of how they receive your rate, stay positive and be professional about it.

7 tips and tricks for negotiating rates in your favor

When you’re new to freelancing, negotiating rates can feel scary. But soon it will become an essential part of running your freelance business. It’s a process you want to get good at so you can make sure you charge what you’re worth and grow your business.

So if this is your first time pitching to a client, or you just need to refine your approach, check out the negotiation tips below. Feel free to use this as your handbook as you navigate negotiations with new and existing clients.

1. Avoid zero-sums and aim for a win-win scenario

Never go into a client negotiation thinking of it as you vs. them. Go into it ready to pitch a win-win scenario. This is one of the key negotiation skills to master.

You deserve a fair rate for your expertise, abilities, and creativity. Your client deserves a qualified freelancer who can do the work within their budget. Avoid a zero-sum situation where one person’s gain is the other one’s loss.

Negotiating isn’t about one-upping or shortchanging the other. You don’t want to start a work contract with the client feeling like they were bullied into an inferior deal. Negotiating work contracts is about finding a mutually agreeable middle ground for both parties.

Don’t just present your rate to the client and expect them to “take it or leave it.” Instead, express your excitement about working with the client. Help the client understand the value you will bring to their project (more on this in the next section) and why hiring you will ultimately be beneficial for both of you.

If you enter the negotiation with the mindset of being fair to both sides, the negotiation process is likely to go a lot more smoothly.

2. Focus on value, not price

As you negotiate your pay rate, don’t get too caught up on the price alone. Instead, drive your client’s focus to the value you provide to their projects.

“Communicate the value, results, and experience that you can provide, and have testimonials to back it up. You need to let the work you’ve done do the talking for you. That way, you can already price yourself at a decent baseline that doesn’t feel like it’s undercutting yourself,” advised Siepen.

Clients aren’t always looking for a lower rate or the cheapest possible freelancer. They want to work with someone who will help them achieve their goals. If you can help them understand how you’re going to do this, they’re often willing to pay the higher rate because they see you as a valuable resource.

Kher explained her approach. “When I reach out to potential clients, my pitch revolves around the value I bring instead of what I charge. Once they’re interested and our vision aligns, I share my charges. Most often, there’s no back and forth. If the prices aren’t acceptable, it’s naturally not a good fit. So I simply wish them luck in their search and move on.”

3. Mind the anchoring

Have you ever been stuck in a situation where a client kicks off rate negotiation with an extremely lowball offer?  For example, the client may offer you $100 for a project that’s worth $500 for you. After negotiations, you finally land at $300, which you think is great as you’re both meeting halfway.

In reality,  the client’s lowball offer becomes the “anchor” from which your negotiations begin, thus setting you up for an unfair (to you) outcome from the very outset. It forces you to accept a rate that is significantly less than what you had planned to charge.

This is called the anchoring effect and is a common negotiation tactic. If you see it happening, the best thing you can do is immediately reject the offer and let the client know you’re not on the same page. So in the example above, you would let the client know that $100 isn’t in the realm of an acceptable offer. Then, present them with a counteroffer that’s more realistic.

4. Timing is key to raising rates

If you’ve been working with a client for a while, it may be time to raise your rates with them. This is common practice for most businesses, so freelancers shouldn't be any different. However, it’s important to pick your time wisely.

Ask for a rate raise at the end of a major project where the client has been especially appreciative of your work. You’ve just proven your value to them so it’s a good time to justify higher pay. Other times that may be good are the start of a new year or around the time when your client is formulating their new budget.

Finally, handle the rate hike professionally. Don’t ambush your clients with a higher rate. Give them notice and give them time to get used to it. So if you’re planning to raise your rates in the new year, let them know a few months in advance so they can prepare. Keep in mind the scheduled rate increase feature only works with new contracts.

5. Consider bundling your packages

As you may understand by now, the key to getting a client to agree to your desired rate is to always communicate value. Another way to do this is by offering bundles or packages to your clients.

For example, if you’re a social media virtual assistant, a client may contact you for help with content creation for their social media channels. You have the opportunity here to bundle other related services and offer them a package that simplifies their social media marketing efforts further.

You would not only create their social media images, but you can also offer additional deliverables such as:

• Post scheduling
• Social media monitoring
• Audience engagement
• Social listening
• Reporting and analytics
• Content curation
• Influencer outreach

By offering more, you’re able to charge more for your services and potentially turn the client into a repeat or ongoing one. You also become a very valuable freelancer for them as you make social media marketing much more streamlined for them, reducing the touchpoints they need to manage with numerous other providers.

By the way, Upwork’s Project Catalog^TM makes it easy for you to create and offer bundled packages to your clients. Learn more about Project Catalog.

6. Negotiate from a position of strength

The first few times you negotiate with a client, it’s probably going to feel a bit daunting. You may find it helpful to think about it as just a conversation. It also helps if you go into the session prepared. Preparation will help you feel confident.

Know your worth and the rates you want to pitch, and don’t be wishy-washy about it. Be confident in your abilities and skills, and be prepared to explain your point of view.

Siepen’s advice is that “if you’re fairly new to freelancing, something I did earlier in my marketing career was set my rate to be 20-30% higher than my usual amount. I can tell you right now, most of the time, it worked. I believe knowing your worth and having confidence in your skillset—even if you think it may be a challenging project—is certainly worth upping your usual rate. Plus, I’ve found it helps to have a little wiggle room to negotiate. The best part is that in many cases, the clients will actually agree to the raised amount.”

The first few times you do it might feel a bit like “fake it till you make it,” but as you start to get more new clients, your inner confidence will come from a feeling of security of already having a few clients. This will give you the confidence you need to successfully negotiate a raise with other potential clients.

“Be professional and confident—4 out of 5 times, clients will agree to pay you what you’re worth,” reminded Kher.

Once you have a few clients under your belt, you may want to raise your rates with some of your existing clients. However, know that it’s always easier to ask a new client for a higher rate than negotiate a raise with an existing client. Be prepared to cut the client and move on if you don’t get the raise you want.

7. Be personal

Negotiations are an essential part of business but it doesn’t mean the process has to be dry and impersonal. At every step of the way, focus on building a genuine connection with the client.

Your clients are much more likely to enjoy working with you if they can get to know you. A personal touch is going to make your working relationship much more enjoyable for both of you. Plus, it’s much harder for a client to say no to a rate hike if they actually like you. So don’t be afraid to open up with your clients.

Engage in small talk with your clients. Use humor. Find something you have in common, and engage in deeper conversations about it to establish a rapport with your client. At the end of the day, you’re a person doing business with another person, so don’t be afraid to just be human.

Great negotiations can lead to lasting client relationships

Following the strategies above will place you in a much better position to negotiate your rates with clients—existing and new. Do your research, know your worth, and approach the process with confidence.

Don’t forget, however, that negotiating your rate is only the beginning of a working relationship with a new client. Set the foundation for a great ongoing relationship by delivering high-quality work and providing great service to your clients.

A well-paying, long-term client is every freelancer’s dream come true. Similarly, a skilled freelancer who is reliable and delivers on their promises is every client’s “unicorn.” So when they find you, they’ll be unwilling to let go of you. They trust you and will want to continue working with you.

The bottom line is that when you provide a good service and prove your value to clients, you place yourself in a much stronger position for rate negotiations. Clients want to work with you and are more willing to pay the higher rates to do so.

‍Ready to find quality clients that pay well and offer you interesting work? Sign up for a freelancer account on Upwork and get started today.