{"id":1451,"date":"2021-05-07T14:02:00","date_gmt":"2021-05-07T11:02:00","guid":{"rendered":"https:\/\/arc.dev\/developer-blog\/?p=1451"},"modified":"2024-04-17T11:30:49","modified_gmt":"2024-04-17T03:30:49","slug":"how-to-set-freelance-rate-software-developer","status":"publish","type":"post","link":"https:\/\/arc.dev\/talent-blog\/how-to-set-freelance-rate-software-developer\/","title":{"rendered":"How to Set Your Freelance Rate as a Software Developer (Fixed &#038; Hourly)"},"content":{"rendered":"\n<p>Regardless of if you&#8217;re a junior or senior developer, when you&#8217;re ready to start with your <a href=\"https:\/\/arc.dev\/developer-blog\/first-freelance-developer-gig\/\">first freelance developer gig<\/a>, you might be thinking, &#8220;How do I convert my annual salary to an hourly rate?&#8221;<\/p>\n\n\n\n<p>Instead of using\u00a0fancy calculators\u00a0that provide you with your salary to an hourly rate, or even\u00a0generic converters, we&#8217;ll walk you through a bullet-proof approach on how to set your hourly rate as a freelance developer. These tips will apply no matter if you\u2019re being paid a\u00a0fixed rate, an hourly rate, or a retainer.<\/p>\n\n\n\n<p>Here are the three main factors to consider when setting your freelancer hourly rate that we will cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>What\u00a0type of freelance projects\u00a0do you want to attract?<\/li><li>What is your\u00a0technical skillset and proficiency level as a developer?<\/li><li>What should your\u00a0take-home pay be after taxes?<\/li><\/ul>\n\n\n\n<p><em>Looking to hire the best remote developers? Arc can help you:<\/em><\/p>\n\n\n\n<p><em>\u26a1\ufe0f Get instant candidate matches without searching<br>\u26a1\ufe0f Identify top applicants from our network of 350,000+ <br>\u26a1\ufe0f Hire 4x faster with vetted candidates (qualified and interview-ready)<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/arc.dev\/\"><em><strong>Try Arc to hire top developers now \u2192<\/strong><\/em><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-clients-pay-affects-your-hourly-freelance-rate\">How Clients&#8217; Pay Affects Your Hourly Freelance Rate<\/h2>\n\n\n\n<p>What kinds of projects do you want to attract? While ideally every project is interesting and you\u2019ll have people wanting to hire you for them, the&nbsp;<strong>complexity<\/strong>&nbsp;of the project should have some sort of influence on your hourly rate.<\/p>\n\n\n\n<p>This brings us to a big factor that comes into play when setting your freelance developer rate:&nbsp;<strong>how<\/strong>&nbsp;you\u2019re being paid.<\/p>\n\n\n\n<p>Are you being paid at a fixed rate, an hourly rate, or a retainer? The size of the engagement as well as how you\u2019re being compensated will be two important factors in setting your rate.<\/p>\n\n\n\n<p>Thus,\u00a0one of the most important aspects of setting your freelancer rate should be the scope of the project.<\/p>\n\n\n\n<p>For a bigger project, you should be very careful setting your rate if your potential client wants to use a fixed-rate payment schedule. In essence, you need to be sure you fully understand the scope of the project. Otherwise, you risk being massively underpaid should the project run long or requirements change.<\/p>\n\n\n\n<p>If you\u2019re working on a smaller project and freelancing is your primary means of making a living, understanding the scope of the project is important for making sure your hourly rate is high enough for the project to sustain you until your next project.<\/p>\n\n\n\n<p>If you set your hourly rate too low and the project is done too quickly, you may find yourself on a tight budget while waiting for the next gig.<\/p>\n\n\n\n<p>Finally, you might have the most leeway in terms of setting your rate if your potential client wants to pay you on retainer, but it\u2019s also a bit trickier to determine what\u2019s a fair rate.<\/p>\n\n\n\n<p>Because being on retainer is like being on call for X hours a week for a presumably bigger project, it has the advantages and disadvantages of both when it comes to payment.<\/p>\n\n\n\n<p>If you\u2019re being paid on retainer, you want to account for the time you spend working, and any extra working hours, without pricing yourself out of the market. Again, how much you charge for the hours you work will be influenced by the scope of the project.<\/p>\n\n\n\n<p>If you work quickly, being on retainer can be a great option. If you charge a medium rate and provide quality work at a faster pace, you could enjoy the benefits of long(er) term project stability with a (maybe) higher than average rate.<\/p>\n\n\n\n<p>Of course, whether you\u2019re able to do that depends on the project and the freelance contract you negotiate.<\/p>\n\n\n\n<p class=\"has-johannes-bg-alt-1-background-color has-background\"><strong>Read More<\/strong>: <a href=\"https:\/\/arc.dev\/developer-blog\/remote-work-from-home-tips\/\">14 Essential Work From Home Tips for a Successful Remote Experience<\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/arc.dev\/?utm_source=CTA-Banner&amp;utm_medium=Image&amp;utm_campaign=Blog-CRO\"><img decoding=\"async\" width=\"1024\" height=\"256\" src=\"https:\/\/arc.dev\/developer-blog\/wp-content\/uploads\/2022\/02\/Meet-HireAI-blog-CTA-banner-1024x256.png\" alt=\"\" class=\"wp-image-2106\" srcset=\"https:\/\/arc.dev\/talent-blog\/wp-content\/uploads\/2022\/02\/Meet-HireAI-blog-CTA-banner-1024x256.png 1024w, https:\/\/arc.dev\/talent-blog\/wp-content\/uploads\/2022\/02\/Meet-HireAI-blog-CTA-banner-300x75.png 300w, https:\/\/arc.dev\/talent-blog\/wp-content\/uploads\/2022\/02\/Meet-HireAI-blog-CTA-banner-768x192.png 768w, https:\/\/arc.dev\/talent-blog\/wp-content\/uploads\/2022\/02\/Meet-HireAI-blog-CTA-banner.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"where-are-you-and-what-are-your-skills\">Where Are You and What Are Your Skills?<\/h2>\n\n\n\n<p>While you think about setting (or resetting) your rate, you also want to do a bit of research. You can use our <a href=\"https:\/\/arc.dev\/s\/salary-database?utm_source=arc-blog&amp;utm_medium=cta&amp;utm_campaign=general\" target=\"_blank\" rel=\"noreferrer noopener\">salary explorer<\/a>\u00a0to compare the wages and rates of thousands of software developers across different tech stacks, regions, and experience levels.<\/p>\n\n\n\n<p>While it may be difficult to get an exact number, other developers often have a range that they display online on freelancer platforms. With this range, you can get an idea of how you might price yourself in relation to them.<\/p>\n\n\n\n<p>On a related note, when you\u2019re looking into other people\u2019s rates for research, be sure to take into account&nbsp;<strong>where<\/strong>&nbsp;the freelancers you\u2019re looking at are located.<\/p>\n\n\n\n<p>Freelancers\u00a0around the world command different rates, so you should keep that in mind when setting your own rate. Because the cost of living differs around the world, so do freelancers&#8217; rates.<\/p>\n\n\n\n<p>Tl;dr: experienced U.S. developers have an asking price of about\u00a0<strong>$60-$100+ per hour<\/strong>\u00a0while non-U.S. developers, depending on where they\u2019re from, set their hourly rates to about\u00a0<strong>$40-60<\/strong>. The price difference among developers from different areas of the world reflects the\u00a0<strong>cost of living<\/strong>\u00a0rather than the skills of the developers.<\/p>\n\n\n\n<p>Although this information is good to keep in mind, don\u2019t sell yourself short and price yourself lower just to be competitive. A race to the bottom does nobody any good.<\/p>\n\n\n\n<p>The most important thing to remember is to evaluate the scope of the project and the client. You probably don\u2019t want to work with a difficult client who only wanted you because you were the cheapest, regardless of fit.<\/p>\n\n\n\n<p>On the flip side, if you\u2019re just starting out as a freelancer, even if you have some industry experience, it may be worth your while to set your rate a bit lower to begin with to\u00a0<a href=\"https:\/\/arc.dev\/developer-blog\/software-engineer-portfolio\/\">build up your developer portfolio<\/a>.<\/p>\n\n\n\n<p>People are more willing to pay for \u201cbrands\u201d they know. Until you build up your portfolio, you\u2019re seen as an unknown entity and people aren\u2019t always willing to gamble on your ability to carry out their vision.<\/p>\n\n\n\n<p>Finally, if you have a strong skill set and are the best at what you\u2019re doing in your area, don\u2019t be afraid to let your rates reflect that. Clients want someone who can get the job done and discerning clients are willing to pay more for someone who can get the job done fast and done well.<\/p>\n\n\n\n<p class=\"has-johannes-bg-alt-1-background-color has-background\"><strong>Read More<\/strong>: <a href=\"https:\/\/arc.dev\/developer-blog\/benefits-of-working-from-home\/\">8 Great Benefits of Working From Home as a Remote Freelance Developer<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"after-taxes\">After Taxes<\/h2>\n\n\n\n<p>Of course, now that you know what kind of projects you\u2019re looking for and what you\u2019re good at, the question is: how much do you want to take home at the end of the day?<\/p>\n\n\n\n<p>Obviously,&nbsp;<em>as much as possible<\/em>, but when you\u2019re setting your rate, think about how big of a role freelance development is going to play in your career.<\/p>\n\n\n\n<p>Are you planning on being in this full-time? Part-time? Is this part of your transition from full-time employee to a full-time freelance developer?<\/p>\n\n\n\n<p>The answer to these questions should play a big part in setting your freelance developer rate as well. If freelance development is more than a side gig, you need to think about how it will help you pay the bills.<\/p>\n\n\n\n<p>Remember, if you\u2019re a U.S. citizen or permanent resident, some of the costs you incur working as a freelance developer can be\u00a0written off on your taxes, such as your home office, hardware, software, etc.<\/p>\n\n\n\n<p>If you\u2019re looking into doing this full time, and plan on making more than $1,000 after deductions, make sure that your hourly rate will cover your expenses and tax responsibilities at the minimum.<\/p>\n\n\n\n<p>Even if you decide you want to only moonlight as a freelance developer, you still have tax obligations to report all of your income.<\/p>\n\n\n\n<p>Therefore, when you set your rate, keep in mind that you\u2019ll be taxed on income from your full-time job as well as income from your part-time freelancing jobs.<\/p>\n\n\n\n<p>While that shouldn\u2019t be the most important factor in setting your rate, making sure you have enough to cover your taxes should be an element of consideration.<\/p>\n\n\n\n<p class=\"has-johannes-bg-alt-1-background-color has-background\"><strong>Read More<\/strong>: <a href=\"https:\/\/arc.dev\/developer-blog\/remote-collaboration\/\">How to Collaborate Effectively as a Remote Freelance Developer<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion\">Conclusion<\/h2>\n\n\n\n<p>When it comes to being a freelance developer, no two projects are the same, so you don\u2019t need to have a one size fits all rate.<\/p>\n\n\n\n<p>If you\u2019re unsure of what to set your rate at, and you have experience and a strong portfolio, don\u2019t be afraid to set your rate a little higher.<\/p>\n\n\n\n<p>That way, if you find a client you want to work with and your rate is a slightly higher rate than they can afford, you have room to negotiate if you want to work with them.<\/p>\n\n\n\n<p>By aiming slightly higher to begin with, you have a better chance of ending up with a fair rate. Not only that, offering to lower your rate can be a good gesture that results in returning clients, which is long-term value for you without sacrificing your needs.<\/p>\n\n\n\n<p>Although it may be difficult to set your freelance developer rate at first, remember, you can always adjust your rate from project to project. Your increased ability or the rising cost of living are perfectly legitimate reasons to change your rate.<\/p>\n\n\n\n<p>You have the freedom to set your own freelance rate and the right to change your rate depending on the project.<\/p>\n\n\n\n<p>One of the best things about being a freelance developer is the ability to choose your projects \u2014 pick a project that interests you, matches your skillset, and don\u2019t be afraid to experiment until you find the rate that works out best for you.<\/p>\n\n\n\n<p><em>You can also explore <a href=\"https:\/\/arc.dev\/\">HireAI<\/a> to skip the line and:<\/em><\/p>\n\n\n\n<p><em>\u26a1\ufe0f Get instant candidate matches without searching<br>\u26a1\ufe0f Identify top applicants from our network of 350,000+ with no manual screening<br>\u26a1\ufe0f Hire 4x faster with vetted candidates (qualified and interview-ready)<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/arc.dev\"><strong><em><strong><em><\/em><\/strong><\/em><\/strong><\/a><strong><em><strong><em><a href=\"https:\/\/arc.dev\">Try HireAI and hire top developers now \u2192<\/a><\/em><\/strong><\/em><\/strong><\/p>\n\n\n\n<p class=\"has-johannes-bg-alt-1-background-color has-background\"><strong>Read More<\/strong>: <a href=\"https:\/\/arc.dev\/developer-blog\/decoding-professional-liability-insurance\/\">Decoding Professional Liability Insurance: Guide for Freelance Developers<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Skip the salary to hourly calculators and converters, and use our in-depth guide on how to set your hourly rate as a freelance developer.<\/p>\n","protected":false},"author":4,"featured_media":1455,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5],"tags":[],"class_list":["post-1451","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finding-opportunities","category-getting-hired"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Set Your Rate as a Freelance Software Developer (Fixed &amp; 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