As a freelancer, I've found that weekly rates, fixed rates, and value-based pricing work best for most projects. I like having a “time-based” billing method and a “fixed” billing method. The first pricing model is per hour. This is a popular pricing model for freelancers who are just starting out and is very easy to manage.
Simply set an hourly rate and then track how much time you spend with each customer during the billing cycle. If you pay for annual subscriptions like Amazon Prime, divide them by 12 to get the monthly cost. Income taxes vary widely from country to country. Personally, I dedicate 25% of my income to taxes and make sure to pay it quarterly to avoid a big tax bill at the end of the year.
Instead of manually transferring money to a different account every time I get paid, I use Catch, co. Catch is a platform built for entrepreneurs. You can set up “autopilot”, which helps you save without lifting a finger. Every time I receive a payment, Catch transfers 25% of that deposit from my bank account to my Catch account for safekeeping.
Then, when it's time to pay my quarterly taxes, I can transfer those savings directly to the IRS from Catch. Next, you must calculate how many days of independent work you can do per year. There are 365 calendar days in a year and 7 days in a week. Divide 365 by 7 and we get approximately 52 weeks.
Assuming you don't work on weekends, we'll multiply 2 calendar days (Saturdays and Sundays) by 52 weeks, which is equivalent to 104 days you won't be working. Time-based pricing is when a service provider charges an hourly rate for a project. Time-based pricing is usually a more common pricing model used by freelancers. Usually, they just got out of college (or hate American companies) and think that charging by the hour is a norm (when it isn't) because that's how they're used to being paid.
A project-based pricing strategy calculates the time it will take to produce all products, resulting in a sum that is usually divided into several payments. Web designers using project-based pricing often have tiered packages (that is, using the base price we calculated above, an independent web designer can simply add time to the equation for more complicated designs and get the rates for standard and premium website packages). To set rates based on projects, many creatives calculate the time they will spend on it. They analyze the scope of a project, calculate the number of hours, and then multiply the hours by their hourly rate.
They add a few extra hours as buffer memory and send a quote.