Start with what you need to earn, not what others charge

Most freelance designers set rates by quietly guessing at what everyone else is doing. It is a fast route to undercharging, resentment and a slow drift towards burnout. The more reliable approach is to work backwards: start with the life you want, add the cost of running a business, and let the arithmetic tell you what you need to charge.

Begin by listing your annual business costs. Be honest and thorough, because these are the numbers people most often forget:

• Software subscriptions, font licences and stock image credits
• Hardware, plus a realistic replacement fund so a dead laptop does not wipe out a month's income
• Accountancy fees and bookkeeping software
• Professional indemnity insurance
• Studio rent or a home office allowance, broadband, phone and heating
• Pension contributions, training, memberships and conference tickets
• Website hosting, portfolio upkeep and marketing
• Unpaid holiday, bank holidays and sick days

Add these up. Next, decide your target personal income — the amount you want to take home before tax. Then allow for tax and National Insurance on your profits, plus payments on account if you are self-employed. A rough allowance of 25–30% of profit for a basic-rate taxpayer is a sensible starting point, though your accountant will give you a firmer figure.

Work out your real hourly rate

Here is the part that surprises almost everyone. You do not have 230 billable days a year. Once you subtract holiday, bank holidays, sick days, admin, marketing, quoting, invoicing and bookkeeping, most solo designers bill somewhere between 110 and 140 days. Use 130 as a working assumption and adjust as you gather your own data.

The formula is straightforward: (target income + tax + business costs) ÷ billable days = your day rate.

Say you want £35,000, expect around £12,000 in tax and NI, and run £6,000 of business costs. That is £53,000 divided by 130 days — roughly £408 a day. Spread across a seven-hour working day, that is about £58 an hour. Divide by six if your days are meeting-heavy, and your hourly figure rises to around £68.

That number is your floor, not your ceiling. It is the point below which work costs you money.

Price projects, not just hours

Clients rarely want to buy hours. They want a logo, a brand refresh, a set of templates or a website that finally looks right. So use your hourly rate as an internal calculation tool, then quote a project fee.

Break the job into phases and estimate time for each: discovery, concepts, revisions, final artwork, file preparation, meetings and emails. Then add a contingency of 15–20% for the scope creep that almost always arrives. If your estimate comes to 30 hours at £60, quote around £2,000 rather than £1,800 — the cushion protects you when a client asks for "just one more variation".

Two further habits help. First, offer three tiers — essential, recommended and comprehensive — so the client chooses the scope rather than haggling over your rate. Second, use a day rate for open-ended work and a monthly retainer for ongoing clients who need regular support.

Charge for the value, not just the time

A logo for a two-person startup and a rebrand for an established chain might take a similar number of hours, but they are not worth the same to the people buying them. Ask questions before you quote: what is the budget, what happens if this succeeds, what does it cost them to get it wrong? A packaging redesign that lifts sales across forty stores carries more value than the hours alone suggest.

If a client's budget is genuinely below your floor, reduce the scope rather than discounting silently. Offer one concept instead of three, or drop the brand guidelines. Never simply shave the price — it teaches the client that your rates were inflated to begin with.

Quote with clarity and hold your nerve

Put everything in writing. A clear quote includes the scope, deliverables, number of revision rounds, what is excluded, the timescale, payment terms, expenses and a cancellation or kill fee. Ask for a deposit — 50% upfront is standard for smaller projects — and state that late payment may attract statutory interest.

When you send the figure, do not apologise for it or bury it in a wall of text. Present it plainly and then stop talking. Silence feels uncomfortable, but it gives the client space to respond rather than an opening to negotiate.

Review your rates regularly

Revisit your numbers every six to twelve months. Costs rise, your skills improve and your portfolio strengthens. A 5–10% increase each year is far easier to absorb than a large jump every five years. New clients get the new rate immediately; loyal clients deserve notice, ideally 60 days.

Keep a simple record of estimated versus actual hours on every project. If you are consistently booked three or four weeks ahead, or winning almost every quote you send, your rates are probably too low. Raise them, and let the work you genuinely want find you.