Most freelancers undercharge by 30–50%. Here's how to calculate what you should actually be charging — and how to raise your rates without losing clients.
Formula: Annual target salary ÷ 1,000 = minimum hourly rate
£60K target → £60/hr minimum. Add 30–50% for taxes, benefits, and downtime → £80–90/hr.
Formula: Estimated hours × hourly rate × 1.3 (scope buffer)
Website redesign: 40 hours × £90 × 1.3 = £4,680. Round to £4,500–£5,000.
Formula: Monthly hours × hourly rate, paid upfront
10 hours/month × £90 = £900/month retainer. Unused hours don't roll over.
Formula: 10–20% of the value you create for the client
SEO work that generates £50K/year in new revenue → £5,000–£10,000 project fee.
Real analysis of a freelancer's pricing situation
Situation Submitted
"I'm a freelance graphic designer with 4 years of experience. I currently charge £35/hr. I work about 30 billable hours per week. I'm based in Manchester. I'm wondering if I'm charging too little."
You're significantly undercharging
Key Findings
Recommendation
Raise your rate to £55/hr immediately for new clients. Don't apologise for it. Test £65/hr on your next 3 proposals. If you're not getting pushback on price at least 30% of the time, you're still undercharging.
Tell Brutally.ai your current rate, experience, location, and specialism — and get an honest assessment of whether you're leaving money on the table.
Start with your target annual income, add 30-40% for taxes and self-employment costs, add another 20-30% for non-billable time (admin, marketing, sick days, holidays). Divide by your billable hours per year. Most freelancers work 1,000–1,200 billable hours annually, not 2,000.
Project-based pricing is almost always better for experienced freelancers. It rewards your efficiency, makes budgeting easier for clients, and removes the awkward conversation about hours. Hourly pricing punishes you for getting faster at your work.
Give existing clients 30–60 days notice. Frame it as a rate review, not an apology. Raise rates for new clients immediately — existing clients are grandfathered temporarily. If a client leaves over a 20-30% rate increase, they were probably not a good long-term client.
You're probably undercharging if: clients never push back on your rates, you're fully booked but stressed about money, you're earning less than you would in a salaried role with equivalent experience, or you've not raised your rates in 12+ months.
You don't need to justify your rates — you need to demonstrate your value. Show case studies, results, and testimonials. Price-sensitive clients who want the cheapest option will never be your best clients. Position yourself for clients who care about outcomes, not cost.