Based on your salary job
Pricing is a complex skill. The first thing you need to know is your cost.
I’ll show how the calculation works if you just get started in freelance and wanna transition from full-time or as a side income.
Your salary from full-time work - RM 4,000
Time consume - 5 days * 6 hour/day * 4 weeks = 120 hours
Hourly rate - RM 4000/120 = RM 33
You can use RM 33 as your base rate.
Cool. Now you know how much the cost to hire you.
To charge your client, just a markup or profit into it. Let’s say I want to have a 20% profit.
1.2 * RM 33 = RM 39.60 = RM 40
If needed, you may add markup for your uncertainty - sick, holiday.
Let’s say another 20%
1.2 * 40 = RM 48
Its easier to come up with a fixed price since you already know the cost.
You want to add a markup if you another cost that includes in your service.
You may use this figure to charge your fixed price project. Get a rough estimate time to complete multiply by your rate. Now, you have a cost to produce the service 👍.
Base on target annual income
For example, I want to earn RM 70,000 per year as a freelancer.
Number of working week per year - 48
Work 5 day per week - 5
Work 5 hour per day - 5
Total hour: 48 * 5 * 5 = 1200 hours
Hourly rate: 70000 / 1250 = RM 58
Optional: Add 20% profit margin to your hourly rate - 1.2 * RM 58 = RM 69.60 = RM 70
Quick tips: Increase your rate if you’ve fully booked. It’s a good indicator that your price is lower than your value.