Freelance Pricing Strategies: How to Price Your Services

A freelance pricing strategy is the way you turn your work into a price: by the hour, by the project, by the value the work brings the client, or as a retainer paid in advance for a set amount of work each month. The models differ in who carries the risk if the work takes longer than planned. With hourly pricing, the client does; with a project price, you do. You can use more than one model, depending on the client and the work.

Billed publishes this page. The pricing definitions are quoted from the open textbooks Principles of Marketing and Introduction to Business 2e (OpenStax), opened on October 30, 2026. This page gives no market rates; it's about how the models work. For working out your own rate, see how to set freelance rates, and for agreeing on a price with a client, how to negotiate freelance rates.

Where a price can come from

OpenStax Introduction to Business 2e defines a pricing strategy as "Setting a price based upon the demand for and cost of a good or service." Principles of Marketing describes three starting points:

• Your costs: a cost-based objective "sets prices based on the costs of doing business". It warns: "The biggest pitfall of utilizing this pricing objective is that it might not align well with the customer's value perception."
• The client's value: a "customer value–based objective, one in which the company has a good understanding of the value-added benefits of a product and sets its price accordingly."
• Other sellers' prices: "A competition-based objective, as its name suggests, is when a company sets its prices according to the prices of its competitors."

Each of the four billing models below can start from any of these.

The four billing models

Hourly

You charge an hourly rate for the time you work and invoice the hours you track.

• Who carries the overrun risk: the client. If the work takes longer, the invoice goes up.
• What it needs: accurate time records, and a way for the client to see what each hour was spent on.
• Fits: work where the scope isn't clear yet, ongoing support and small changes.

Project (flat fee)

You quote one price for a defined result, which can include a set number of revisions.

• Who carries the overrun risk: you. If the work takes longer than planned, your effective hourly earnings fall.
• What it needs: a clear scope, and a written way to price changes. See freelance contract essentials.
• Fits: work you've done before and can estimate.

Value-based

You set the price from what the result is worth to the client, as in the customer value-based objective above, rather than from your hours.

• Who carries the risk: you. Without a good understanding of the value to the client, the price is a guess.
• What it needs: an understanding of the client's goals before you quote.
• Fits: work whose result the client can measure.

Retainer

The client pays a set amount in advance each month for an agreed amount of work or availability.

• Who carries the risk: shared. You get predictable income; the client gets reserved time.
• What it needs: a written scope for what the monthly amount covers and how extra work is billed.
• Fits: ongoing work with the same client. See the guide to retainer invoicing.

For a wider look at service pricing, see how to price your services.

Sample: one project, priced two ways

The project, rates and hours here are a sample, invented for this example. They aren't market rates.

A designer estimates a website project at 40 hours. They can quote it hourly at $75.00 an hour or as a flat project price of $3,200.00. The project ends up taking 46 hours.

1. Estimate at the hourly rate: 40 × $75.00 = $3,000.00.
2. Hourly, actual: 46 × $75.00 = $3,450.00. The client pays for the 6 extra hours.
3. Flat fee, actual: the client pays $3,200.00, whatever the hours.
4. Effective hourly earnings on the flat fee: $3,200.00 ÷ 46 = $69.57 an hour, below the $75.00 rate. Had the project taken the estimated 40 hours, the flat fee would have earned $3,200.00 ÷ 40 = $80.00 an hour.

The flat fee paid more if the estimate held, and less when the work ran over. To find your own break-even rate, try the hourly rate calculator.

Where Billed fits

Billed's time tracking page says: "Create an hourly rate project, set its hourly rate, and Billed tracks the charge for each task as you log it." Its features page says: "Manage your flat rate projects and create Invoice at any stage of the project." For retainers, its recurring invoices page says: "Establish a stable cash flow with retainers." For quoting first, its estimating software page describes "converting approved estimates into invoices with just a few clicks." To bill the result, see how to create a professional invoice.

Related Articles

• How to Set Freelance Rates
• How to Negotiate Freelance Rates
• Freelance Contract Essentials
• Guide to Retainer Invoicing

Frequently Asked Questions

What are the main freelance pricing models?

Hourly, project or flat fee, value-based, and retainer. They differ in what the price is tied to (time, a defined result, the value to the client, or a monthly commitment) and in who carries the risk if the work takes longer.

Should I charge hourly or per project?

It depends on how well you can estimate the work. Hourly pricing puts the risk of extra hours on the client; a project price puts it on you. In the sample on this page, the flat fee earned $69.57 an hour when the work ran 6 hours over the estimate.

What is value-based pricing?

Setting the price from what the result is worth to the client. OpenStax describes a customer value-based objective as "one in which the company has a good understanding of the value-added benefits of a product and sets its price accordingly."

How do retainers work for freelancers?

The client pays a set amount in advance each month for an agreed amount of work or availability. Write down what the amount covers and how extra work is billed.