The entire task of putting a value on the work you do can seem difficult if you're a new freelancer who hasn't yet established an hourly rate. It is, however, an essential component of any hourly invoice, as it ensures that you are paid for your services.  There are a number of important factors to consider when determining your hourly rate, all of which are intertwined with your freelance business operations plan, payment process, and the type of work you do. Consider the following factors when determining how much your time and services are worth billing for: your competition within the job market your bottom-line, or the figure you get after calculating how many resources (both time and money) you spend when fulfilling a project with a client before you make a profit your credibility as a freelancer and business partner When it comes to your job market competition, you should consider how much your competitors charge for similar services. Make adjustments based on your unique business model and offerings to avoid overcharging or undercharging your clients. To position yourself as economically and professionally competitive in the market, price yourself according to the market.  It's critical to keep your bottom line and return-on-investment in mind as you work to determine your hourly rate. Calculate both the time and the money you spend to complete a project with a client to arrive at this figure. These figures should include the money you spend on materials as well as the time you spend on project-specific activities like traveling or building.  From there, you can establish a base figure for calculating your hourly rate, ensuring that you profit from each transaction.  You can also set your hourly rate by aiming for a specific annual salary. Determine a target salary that is realistic for your freelancing business's capabilities. Instead of overcharging your clients, use this method to calculate an hourly rate that reflects the competition in your industry market, and then adjust based on your freelancing business's resources. Set an hourly rate that reflects your target annual salary after calculating an estimate for your total annual expenses.  At the end of this exercise, your profit margins may or may not be what you expected; however, this data will be useful in setting your initial rates and, later in the process, reevaluating your payments and workflows as you grow your freelancing business. The billable hour—or the amount of time you charge a client for a specific task or activity associated with the project—is another important part of establishing an hourly rate for your invoices.  Billable hours for a typical 9-to-5 job are consistent across the board: eight hours per day, 52 weeks per year. As a freelancer, you have greater scheduling flexibility and, as a result, greater payment flexibility. To come up with an hourly rate that truly represents the value of the work you provide clients, try to capture an accurate representation of the amount of time dedicated to each of your provided services.