The Fundamental Principle: You Are Not an Employee
An employed worker on $40/hour receives super, paid leave, sick days, equipment, office space, and insurance provided by the employer. As a freelancer, you provide all of this yourself. A useful rule of thumb for converting an employment rate to a freelance rate is to multiply by 1.5–2x minimum.
Market Research: What Are Other Australians Charging?
Before setting your rates, research what others in your field are charging in Australia. Resources include Upwork's rate data (filter for Australian freelancers), SEEK's salary data for employed equivalents, LinkedIn Salary Insights, and industry-specific surveys. Industry associations and online communities for specific freelance categories often have candid discussions about rates.
Cost-Based Pricing: The Minimum Floor
A simple calculation: determine your desired annual personal income, add your estimated annual tax liability, add your business expenses ($5,000/year is a reasonable estimate), and add super contributions ($10,000). Divide by your expected billable hours (e.g., 1,125 hours = 45 weeks × 25 hours). This exercise often reveals that the rate a new freelancer feels comfortable charging is significantly below what they actually need to earn.
Value-Based Pricing: The Path to Premium Rates
The most successful Australian freelancers don't sell their time — they sell outcomes and value. Value-based pricing means charging based on the value your work delivers to the client, not the time it takes you. Moving to value-based pricing requires understanding your clients' business goals, quantifying the value your work creates, and having the confidence to price accordingly.
How and When to Raise Your Rates
Review your rates at least annually. If you're fully booked (more than 85% utilisation over three months), that's a clear signal your rates are too low. For new clients, simply quote higher rates. For existing clients, provide adequate notice (typically 30–60 days). A well-run freelance practice should see rates increase 10–20% per year in the first few years.