Why Most Freelancers Charge by the Hour Wrong – and how to fix it

Most people equate freelance with charge by the hour.

It’s what lawyers, plumbers, cabbies, and countless other freelancers charge, including a lot of designers, illustrators, DJs, copywriters, producers, creative directors, music composers and other assorted creative freelancers like you. 

Even if you charge a day rate or a project fee, you are probably either basing it on an hourly rate, or doing the math after the job is over to figure out how much you made per hour. 

Clients love paying hourly. It makes them feel like they are getting exactly what they are paying for and that you’re not slacking off and charging them for it. 

But there are lots of ways in which hourly doesn’t work for the creative freelancer. 

And we want to help. 

Who are we? We’re Aaron and Andrew, two creative freelancers like you.

And we created Mt. Freelance, a 33-video online course and community to help freelancers freelance better. 

So, give our pros and cons of hourly video a watch. And then we’ll dig in a little deeper. 

Learn More about Mt. Freelance

In addition, Siva Mahesh of leading career-based website Dreamshala says: “In order to keep up decent client engagement and satisfaction, most of the freelancers try to charge lower hourly pay rates. But in return, this trend is creating some incorrect math and costing freelancers’ market value adversely. If you can’t manage your work value, you will end up in the less pay rate receiving arc, regardless of your skill level. With this in mind, one must fix their hourly pay rate after calculating their expenses as well as efficacy. Similarly, you must pick a goal-oriented approach, which can act as a driving force to reach the level you are thriving for“.

As we discussed in the video, knowing how many hours you can charge, and ensuring that is enough time to get the job done, is crucial.

Tracking hours is huge too, we’ve been guilty of going a few days without logging our hours and forgetting how much time we actually spent. So do your best to track hours every day. 

But the biggest mistake freelancers make when it comes to hourly is what we touch on at the end of the video — only charging for the time you are head down, working on the job at hand. 

This is fair and ethical, but it’s a one-way-ticket to hating freelance because you aren’t making enough money. 

Any and all time you spend on a job should count towards your invoice. Here’s a hypothetical but very possible scenario.  

An illustrator gets hired by a company to design a systems of icons for their new brand. 

Let’s say it takes 20 hours of illustrating time to get a good, solid first round done. Those 20 hours are all billable. 

As are the 6 hours spent doing revisions. 

And that last hour tweaking the icon that the client still has some issues with. 

We’re up to 27 hours. And just so we’re clear, if there are some coffee, bathroom, or getting some fresh air breaks during that time we are not clocking out and clocking back in. 

There are also other hours that should figure into your invoice. 

Once the job started there was a brief, right? A meeting where the company asked the illustrator to come in, learn more about the company and what kind of icons they need. 

Let’s count that entire 2 hours of the meeting. 

Plus the hour of travel time it took the illustrator to get the office and back. Travel time? 

Sure, in this case yes. On the one hand, we are thinking about the job on the way to and from the job. On the other, it’s not like we can bill those hours to anyone else, can we? 

They have asked us to come in, and so we charge for our travel time. 

Then there’s the thinking time spent before sitting down to illustrate. 

If our illustrator spent a few hours thinking about what kind of icon system to create, that’s billable time! 

Be honest, and be fair, but an icon system isn’t some magical thing you pull out of a set of illustration pens. 

If the illustrator is actively using their training, knowledge, experience, critical thinking and creativity during that time to come up with something smart, unique and right, they should be able to charge for that time. 

What about research time, when the illustrator is seeing what competitors are doing design-wise in that category, and looking at icon systems for inspiration? 

That’s billable time too. 

Taking an hour to write an email with questions after the brief and sending it, and then spending another hour reading, reflecting and responding to their response? 

That’s two hours of valuable, billable time spent that will help make the icon system even better. 

If the client texts with a “crazy idea” on a Saturday and it takes 15 minutes to craft a tactful response, that’s 15 minutes of billable time!  

You see where this is going? 

Sure, it might take an illustrator 20 hours to design a system, pen to paper. 

But it’s really going to take 27 hours with two rounds of feedback. (And that’s assuming the client knows what they want and is good at giving feedback.)

And the effective freelancer also has to factor in the briefing time, thinking time, research time, email time, feedback time and so forth. 

It’s probably, more realistically a 45 to 50 hour job. 

If you just read and thought, exactly. That’s what I would have estimated, good on you. 

But if that feels alien to how you charge, you are putting in hours of work for free. 

Obviously you can’t tell a client a job will take 20 hours and then charge 50 after the fact. Instead, give you a client an accurate sense of your process and the time it will take before you agree to the job. 

A big company won’t balk at 50 hours for an icon system. In fact, they will probably think they are getting the bargain of the century. 

After all, they would normally hire a design firm who would charge over 50 hours for the briefing ALONE! The firm is going to bring 8 people on and make the brief a full-day session. That’s 64 hours to just hear what the job fully entails. 

On the other hand, a small yoga studio might not be able to afford 50 hours of your time. 

So in the case, maybe they get half the icons. Or much simpler ones. The brief happens over the phone. There isn’t much thinking or research time. And they only get one round of feedback. 

Maybe that is a 20 hour job. But even still, the illustrator is padding the hours so there is time for the necessary creative process to happen. 

As freelancers we often feel like we should only charge for our at-the-desk working hours. 

But let’s remember a few things. 

Anyone who hires us is already saving tens of thousands of dollars by hiring us because they don’t have to hire a full-time employee to do it. They don’t have to worry about health care, sick days, holiday bonuses and on and on. 

And any time we are spending on a client project, whether it’s emailing, texting, thinking or uploading files, is time we can’t spend on ourselves, or on another client. 

When a client hires us, they aren’t just hiring us for illustrating, or copywriting, or sound composition. They are also hiring us to manage the project, communicate effectively, respond to feedback, track our time, problem solve if and when complications arise, and so on. 

We should negotiate for and get paid for that stuff too.

Sound good? Great. Okay. 

Are you ready for more, so you freelance more effectively than ever? 

Take our survey and get another free lesson from Mt. Freelance. 

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