Pricing for Freelancers

The right pricing is one of the most important success factors for freelancers. Prices that are too low lead to burnout and financial problems, prices that are too high cost you contracts. This guide helps you find the optimal price for your services.

Hourly Rate vs. Fixed Price

Both billing models have their place – the choice depends on your project and work style.

Hourly Rate – Advantages

• Compensation for exactly the work performed
• Flexibility with project changes
• Additional work is compensated
• Simple calculation without detailed effort estimation

Hourly Rate – Disadvantages

• Price pressure through comparability
• More efficient work means less income
• Administrative effort through time tracking

Fixed Price – Advantages

• Fixed, predictable income
• No accountability for individual hours
• Faster work = higher effective hourly rate
• Focus on quality rather than time

Fixed Price – Disadvantages

• Financial losses possible with time overruns
• Many revision rounds reduce profit
• Requires precise upfront calculation

Tip: For recurring, well-calculable projects, fixed prices work better. For new or complex projects with unknown scope, hourly rates are safer.

Calculating Your Hourly Rate Correctly

Many freelancers base their rates on employee salaries and forget important cost factors. Here's the complete calculation formula:

Basic Formula

(Desired annual income + Operating costs + Social security + Taxes + Reserves)
÷ Billable hours per year
= Hourly rate (net)

Billable Working Days Per Year

Not every working day is a project day. Realistic calculation:

• 365 calendar days
• minus 104 weekend days
• minus 10 public holidays
• minus 27 vacation days
• minus 10 sick days
• minus 10-20% for acquisition/admin
• ≈ 173 billable days = approx. 1,384 hours

Costs to Include

Calculation Example

Goal: 60,000 € net annual income

Common Calculation Mistakes

1. Using employee salary as comparison – Employer contributions (~20%) are forgotten
2. Not including vacation and sick days – Nobody pays for these days
3. Underestimating acquisition time – 15-25% of time goes to client acquisition
4. No risk premium – Slow periods must be factored in

Average Hourly Rates 2024/2025

Based on Freelancer-Kompass 2025 (3,210 respondents), Malt.de, and AGD compensation tariff:

The DACH average is 104 €/hour (2025).

Important Industry Insights

• 44% of freelancers calculate prices anew for each project
• 77% decline projects with too low hourly rates
• 80% orient themselves to market value
• Freelancers with >10 years experience earn on average 20-30% more

Communicating Price Increases

When to Increase?

• Annually for inflation adjustment (at least 2-3%)
• With increased expertise/certifications
• With increased demand for your services
• When the market allows it

How to Communicate?

1. Announce in advance – At least 4-8 weeks ahead
2. Justify – Rising costs, expanded expertise, market level
3. Emphasize value – What the customer gains
4. Give existing customers transition time – Possibly old prices for ongoing projects

Example wording:

"Starting [date], I'm adjusting my fees to current market levels. For you, this means an hourly rate of [X] € instead of [Y] €. The adjustment reflects my increased expertise in [area] and allows me to continue delivering the quality you've come to expect from me."

Tips for Proposal Air

With Proposal Air, you can optimize your pricing:

1. Use price suggestions – The AI knows market prices for your industry
2. 3-tier pricing – Offer three options (Basic, Standard, Premium)
3. Fixed vs. hourly – Experiment with both models
4. Avoid discounts – Offer added value instead
5. Track prices – Analyze which prices get accepted

Related Topics

• Taxes and Legal – Correct VAT display on proposals
• Conversion Optimization – Psychological pricing and 3-tier models
• Best Practices – Presenting prices professionally