Five Things You Need To Be Taking Into Account When Setting Your Freelance Rate

When it comes to setting your rate as a freelance artist or creator, there’s a lot you have to consider. Some things may be obvious like time, skill, and material costs - but there is so much more that goes into making sure your rate results in a liveable wage.?

Here are the five factors that often go overlooked by freelancers when setting their rates:?

Taxes | Self-employed people are responsible for paying the same federal income taxes as everyone else. The difference is that they don't have an employer to withhold money from their paycheck and send it to the IRS—or to share the burden of paying Social Security and Medicare taxes. So make sure you are setting aside money for your taxes on a regular basis so you're not surprised at the end of the year. A good rule of thumb is to set aside about 30% of each paycheck for taxes, but talk to your accountant to determine what makes the most sense for you.

Health Insurance?| The current?average cost?for self-employed health insurance in the United States is about $540 a month, or $6,480 annually. However, the price can be much lower if you qualify for a tax subsidy. Where you live also plays a major role in determining your health insurance costs as it can be far more expensive to get insured in some states, like New York, where the average cost is currently around $700.

Cost Of Living In Your?City | The cost of health insurance is not the only thing impacted by where you live. Essentials like rent, insurance, food, and more can often fluctuate drastically depending on where in the country (or world) you are living. Take the time to understand what your true cost of living is, and make sure that is reflected in your rate.

Time Off | Just as traditional salaried employees get paid time off, so should you. So when calculating your rate consider how many days do you want off this year and build that into your calculations.

Every freelancer is going to have a different way of baking these items into their rates, but whether you prefer to charge by the hour, or by project, I recommend taking the time to fill out a rate calculator to get a full picture of what goes into running your business. There are plenty of free calculators online, but I like this one since it is free, beginner-friendly, and has the essentials already built in.