Freelance pricing: include the hours clients never see

A project takes five delivery hours. Your chosen labor allowance is $30 per hour, direct expenses are $40, and monthly fixed overhead is $600. With 100 realistic billable hours each month, this job uses $30 of overhead. The starting cost is $220.

Add a 10% contingency allowance and the modeled cost becomes $242. With a 30% target operating margin, a 3% payment fee and a $0.50 fixed payment fee, the calculated price is $361.94 before sales tax.

Count all the work

Include discovery, preparation, meetings, revisions and delivery in your estimate. A five-hour job that actually takes seven hours costs more even if the client receives the same deliverable. In this example, seven hours increases buffered cost to $321.20 and the modeled target price to $480.15.

Check capacity before promising an income goal

100 delivery hours allow twenty five-hour jobs, but only fourteen whole seven-hour jobs. Time spent selling and administering your business reduces billable capacity. Set a realistic number rather than dividing overhead by every hour in the month.

Turn the number into a clear quote

Write down scope, exclusions, revision limits and timing. A calculation helps you understand cost; it does not replace an agreement with the customer or prove what the market will pay. Compare estimated hours with completed work and refine your assumptions.

Try the calculation with your own costs

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Need a complete job worksheet?

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