Each of us has passions that we hope to pursue in our life. But, we all know that there are bills to pay and mouths to feed. If you’re curious (or, let’s be honest, worried) about the financial implications of venturing into freelancing, this is the post for you! Read on to find out how much a freelancer can make. (Hint: yes, you can make enough to live solely off your freelance income.)
One of the biggest questions people have about freelancing is around income: How much does a freelancer make and how much can you expect to earn as a freelancer in your field?
Let’s not beat around the bush here: It is possible to make a living wage entirely from freelance income. In fact, it’s very much possible to make six figures as a freelancer. It will take hard work, and some skills are naturally more in demand than others, but if you build a good network, gain the right experience, and establish your system to make the work come to you, it’s all within your grasp.
There is usually a different payment scale used for contractors and freelancers than for employees. Freelancers and contractors typically command a higher per-hour wage than their on-staff counterparts. That’s because they are responsible for paying self-employment tax (in the U.S.) and for covering benefits that employees often receive, such as healthcare and paid time off.
Factors that Influence Your Income
While freelancers do charge more per hour, a few factors will determine exactly how much you make in a given month or year:
- How good you are at what you do
- How pleasant you are to work with
- Where you live (inevitably, rates in New York City may look a little different than in Fargo, plus some trades are more geographically bound than others)
- How much you’re willing to network, drum up business, and hustle for work (of course, this applies to all career paths, freelance or otherwise!)
Of course, if you’re looking to freelance part-time or as a side hustle, your earning ability is influenced by how much time you can devote to your freelance work.
Determine Your Freelance Rate
The real question becomes: What’s the best way to determine your rates as a freelancer? Unless you are a beginner taking on low-paying jobs for the sake of building your portfolio or client base, you can quote an hourly wage equivalent to contractors in your line of work.
While that hourly rate will vary based on where you live and your line of work, there is a way to get a rough estimate of how much you can make for a salary.
1. Skip online calculators
First let’s talk about what not to do. Pass right on by those “online calculators.” It’s hard to tell where they are getting their information from, so they are unreliable as indicators of your earning potential.
2. Explore job listings
You’ve skipped the calculators. Now, it’s time to look at job listings in or near your city. Make sure the postings match your experience level. Many will give you the salary range for the position, and that can be a great source of data for your analysis. (Keep in mind that universities and non-profits usually offer lower pay rates.)
3. Reach out to recruiters
Reach out to recruiters in your field to get a sense of how much money you can expect to earn. For many freelance careers, it makes sense to connect recruiters anyway since they can be on the lookout for freelance work that may fit your experience.
So, pick up the phone, send an email, or connect on LinkedIn—and then ask them what salary range someone with your experience might expect.
4. Calculate a salary range
Once you have salary ranges from your own research and recruiters, you can get a sense of what your peers make in a year. To determine your hourly rate, simply average out the salaries you find, and divide by 2080. (40 hours a week x 52 weeks = 2080 hours.) You then have a typical on-staff hourly wage. Now multiply by 1.5 to account for things like taxes and benefits.
This will give you a well-researched estimate of what to charge your clients. You will likely want to have a number in mind, but have a range in your back pocket. Some of your clients will be happy to pay you more for your services! And of course, some will want to pay much less.
As a freelancer, it’s really up to you what rates you charge to which clients. As you gain experience, you will probably find a rate that you are no longer willing to work below.
Your turn! Have you found any other unique ways to find salary information or determine your freelance income? Let us know in the comments below!
Last Updated on December 12, 2022 by Craig Galo