Hourly Freelance Rate

August 13, 2020 (4y ago)

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.