Fast Facts (in case you don't have time to read the whole thing!) 🤯
- Freelancers and fractional professionals often undercharge because they forget to factor in taxes, time off, and business expenses.
- The SOMOS Rate Calculator helps you set a fair hourly and monthly rate that reflects your expertise and covers real costs.
- Always include contractor costs, holidays, and commissions in your pricing to avoid burnout or financial stress.
- Your rate should evolve as your skills and market value grow: review it at least once a year.
- If clients push back... adjust the scope, not your worth.
Why Your Rate Matters 💚
If you work independently as a freelancer, consultant, or fractional professional, your rate isn’t just a number: it’s the foundation of your financial stability, wellbeing and bility to keep doing mission-driven work.
Too many people start out by guessing their rate or benchmarking against friends but the truth is sustainable pricing requires more than a gut feeling.
You need to account for everything that makes up the real cost of working independently, from taxes and insurance to time off and business overhead.
The goal : find a rate that reflects your expertise and lets you thrive.
Introducing Our Rate Calculator 🧾
To help freelancers and fractional professionals price their work fairly, we built a Free Rate Calculator that goes beyond salary conversions. It factors in real-world costs, so you can stop undercharging and start building a sustainable business.
What You’ll Need
- Your previous annual salary (or target income)
- Estimated contractor costs (software, pension, healthcare, insurance etc)
- The number of days off you plan to take each year
- Whether you work via marketplaces, agencies, or directly with clients
How It Works
- Enter your target annual income.
- Choose an uplift to cover your contractor/self-employment costs.
- Adjust for your paid time off (you will need some!)
- Include any recruiter or marketplace commissions.
- Get your recommended hourly and monthly rate.
It's not a perfect science but the tool is designed specfically:
- to give you a quick, transparent idea of a potenial range.
- for people balancing flexibility, impact and financial independence.
What to Include in Your Rate 💼
Base Salary & Benchmarks
Start by identifying your desired annual income (this can be based on your previous income or a target you have in mind).
This isn’t about inflating your worth: it’s about acknowledging it.
Think about what a full-time professional with your experience and results would earn.
Contractor Costs
Once you go independent, you take on costs an employer used to cover.
These might include:
- Pension or retirement contributions
- Healthcare or insurance
- Workspace, equipment and software
- Professional memberships or training
Paid Time Off & Commission
You’ll likely take unpaid time off for holidays, illness or creative breaks. Factor those days in so you don’t undervalue your time.
If you use recruiters or online marketplaces, include their commission percentage. It’s a real business expense that can quickly eat into margins.
Setting & Negotiating Your Rate 🕺🏻
Don’t Undervalue Yourself
It can be tempting to lower your rate for fear of losing work—especially when starting out or working with smaller nonprofits. But remember: your expertise is the product. Sustainable pricing allows you to keep delivering great results without burning out.
When to Raise Your Rates
Your rate should evolve with your skill set, impact and market conditions.
Raise your rates if:
- You’re delivering consistently strong results.
- You’re overbooked or turning away work.
- You’ve invested in new skills or credentials.
- The cost of living or your expenses have increased.
Discounts & Mission Alignment
If you work with value-aligned causes, it’s fine to adjust your rate but do it intentionally.
Sustainable freelancers price fairly so they can stay in the sector long-term.
Handling Pushback
If a client challenges your rate, stay confident.
Explain the value you provide and the costs you carry as an independent professional.
If flexibility is needed, reduce the project scope, don’t slash your worth just because.
Retainers for Stability
Retainers offer recurring income and reduce uncertainty.
They benefit both sides: you get predictability and your clients get consistent, high-quality support.
FAQs: Pricing & Rate Questions 🤔
How often should I update my rate?
Review your rate at least once a year—more often if your workload or market shifts. Even a small annual increase helps keep your income aligned with reality.
Should I charge differently for nonprofits or startups?
Yes, if it aligns with your mission but don’t default to discounts. Structure value-based pricing instead.
How do I deal with inconsistent income?
Diversify your clients, use retainers and plan savings buffers for slower periods.
How do I know if my rate is fair?
Compare it against industry standards and your calculator output. If it covers your costs, reflects your experience and supports your wellbeing... it’s fair!
Ready to Run Your Numbers? 📊
Your rate should empower, not restrict you.
Try the Free Freelance & Fractional Rate Calculator now to find a rate that reflects your value, expertise, and vision for a sustainable career.
Let’s Connect 👋🏽
I hope our calculator is helpful for you!
Feel free to:
→ Subscribe to my newsletter, Build With... 🌱 to keep an eye on what we’re building.
→ Reach out on LinkedIn! I’d love to hear from you.
Thanks for stopping by! I hope the guide is helpful :)
Khawar | Founder & CEO @ SOMOS
