Six Pricing Models for Your Freelance Business You Should Know About

Adem Hodzic

Written by: Adem Hodzic

Are you strugling to get paid by clients? Myabe you should try a new pricing model. Here's six different pricing models for your freelance business

Hey folks.

When I started freelancing I didn’t know how to price myself. I thought that there were only two ways to price my services and that is per hour rate and per project rate. I had this impression because I started freelancing via Upwork and these were the only two ways of payment.

Now I’m a bit more experienced and I will tell you about six different ways you can charge as a freelancer.


I’m sure most of you are familiar with charging per hour but here is a quick rundown for you that aren’t.

You and your client agree to a certain amount of money on how much an hour of your time is worth. You track your hours via tools like Toggl or Bonsai Time Tracker. When you send your client an invoice, you list out how many hours you’ve worked on the invoice and you attach a report that you exported from your tool of choice.

Advantages of charging per hour are:

Cons of charging per hour are:

Regarding my personal opinion, I will be a heretic of the freelance community and say that I prefer an hourly rate over the per-project rate.

My reason is that I’m not freelancing full-time right now so I can’t give out a good estimate of how many days will something take for me to make.

It’s also because I mostly work with people that already have a project built and they hire me to build more features and fix bugs. I like to call myself a “support software developer”.

Per Project

Charging per project is pretty straightforward.

You talk with your client, you agree on a budget and deliverables and you start working.

It’s important to emphasize that you should always take 30-50% upfront with new clients.

Taking upfront payment serves a couple of purposes:

Cost of the project, payment dues and deliverables should be clearly stated in a contract so both you and the client are aware of what will you be getting and when. I use Bonsai to generate contracts.

Pros of charging per project:

Cons of charging per project:

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Monthly Retainer

The monthly retainer is about the closest you will get as a freelancer if you were working in a 9-5 job.

In short, the client pays upfront a certain amount of money for a certain amount of hours you will put into a project for a given month.

You can choose whether the hours bought can transfer to the next month or not. This is all up to you and your client and what you state in your agreement.

Monthly retainers are usually in place after a project is finished but will need long-term support. Some examples might include:

Pros of charging a monthly retainer:

Cons of charging monthly retainer:

Revenue Sharing

Revenue sharing is a type of agreement between you and your client where you will work for a smaller rate than usual in exchange for % of the Revenue from the project.

I’ve always been against Revenue sharing since most of the offers I received are from people that are not serious or don’t want to invest or have the budget.

I changed my mind once I was offered to work on a browser game that was 80% done and well designed but the developers didn’t have the budget. I was too busy with other projects at the time but I’d seriously consider the offer.

Pros of revenue sharing pricing:

Cons of revenue sharing pricing:

Revenue sharing is a double-edged sword. I just wanted to list it here because I’ve heard from people that made ten times the money they would usually make from working on the project for just money.

I’d personally just the hell away from this.

Package Pricing

If you ever been to Fiverr, you’d notice that every offer listing has different tiers. They differ in price and what you will be getting. That is essentially package pricing.

You put up a predetermined price for a predetermined amount of work. For example, you might charge $700 for a 5-page Wordpress site, $1200 for a 7-page site and $2000 for a 10-page site with a custom theme.

Pros of package pricing:

Cons of package pricing:

Package pricing is the true double-edged sword of freelancing. Regarding my personal opinion, I’m not sure if this is that good strategy in the long run but I don’t see why you shouldn’t use it.

Performance-based Pricing

Performance-based pricing is the pricing model where you get paid based on much impact your work had on the project.

Performance-based pricing is common in marketing projects such as doing SEO of a website or optimizing landing pages for PPC campaigns.

Pros of performance-based pricing:

Cons of performance-based pricing:

In essence, performance-based pricing is a great model for experts and people who know what they’re doing. I’d stay away from it until you’ve got a couple of clients under your belt.


These different pricing models will work differently for different freelancers. Some work excellently in one niche and awful in another.

I would love to hear back from you on what’s your preferred pricing model. You can send me an email or send me a DM on Twitter.


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