Freelancing is becoming an increasingly popular way to make a living. You don’t need to be stuck in a traditional job, you can work whenever and wherever you want, and you have the freedom to choose your own projects. But how much money can you really make as a freelancer?
How Much Money Does The Average Freelancer Make?
The average freelancer in the US makes about $23 per hour. If you look at a full-time income, this works out to about $49,000 annually. According to a 2022 Payoneer study, the average earnings worldwide is higher, at $28 per hour.
Of course, these numbers vary depending on the type of work that you do and how experienced you are. For example, freelance web developers tend to earn more than graphic designers.
The Payoneer study also showed that freelancers with a college degree earn an average of $24 per hour, compared to high school graduates that earn $22 per hour. Education won’t typically affect your earnings as much as your experience or specific skills.
The type of service you provide will also impact your income, with some services paying much more than others. For instance, freelance writers earn, on average, £62,500 in the UK, while editors make £45,500. Location will also affect things, as will the kinds of clients you serve.
I’ll go into more detail about all of these factors below, but first, what does someone at the top of their game make in the freelancing industry?
How Much Do Top Freelancers Make?
At the high end of the spectrum, top freelancers can make millions of dollars per year. It’s not uncommon for freelancers to bring in 6-figure salaries even with only a few years of experience if they can offer high-quality services in the right niches.
Upwork suggests the yearly salary of programmers, marketers, and data analysts can all reach $100,000 or more. However, what defines a ‘top’ freelancer will vary by industry. But what other things affect how much you can earn as a freelancer?
What Affects How Much Money You Can Make As A Freelancer?
The industry that a freelancer works in can have a significant impact on their earning potential. Some industries naturally pay much higher rates than others (such as legal and financial industries), and some are more competitive than others, which can drive prices down.
Skills & Competencies
The skills and competencies of a freelancer can also impact their earning potential. Freelancers with highly specialized skills or niche expertise can often command higher rates than those with more general skills. For example, a freelance software developer with experience in a specific programming language may be able to charge more than a generalist web developer. However, the more you specialize the harder it can be to find consistent work.
The value proposition of a freelancer is their unique selling point. It’s what sets them apart from their competition and makes them more valuable to clients. Freelancers who can offer a unique value proposition are usually able to charge higher rates than those who have nothing unique to offer.
For example, a freelance content marketer who specializes in creating content for the healthcare industry may be able to charge more than a generalist content marketer. But again they will be limited in terms of their target client base, and so sometimes being more of a generalist can lead to more work and therefore higher earnings.
Standard Pricing & Payment Options
The pricing and payment options freelancers use can also impact how much they can earn. Freelancers who charge hourly rates may earn less than those who charge by the project or offer a retainer-based service. Freelancers who offer payment plans or accept multiple payment options may be more attractive to clients, leading to increased earning potential.
I’ll talk more about payment options later in this article.
Finally, COVID-19 had a significant impact on the freelance industry, with many experiencing a decrease in income due to the economic downturn. However, there was an increase in demand for freelance services related to remote work and technology to support virtual communication. Major global events can therefore have a big impact on the viability of freelancing.
Freelance Earnings By Industry
The tech industry is one of the most lucrative industries for freelancers. With the increasing demand for software developers, data scientists, and web developers, freelancers in this industry can command high rates.
The creative industry includes fields such as graphic design, content creation, and video production. While the hourly rates for freelancers in the creative industry are typically lower than those in the tech industry, there is still potential to earn a good income.
Business Consulting Industry
The business consulting industry includes fields such as management consulting, financial consulting, and marketing consulting. Freelancers in this industry can command high rates due to their specialized knowledge and expertise.
According to Salary.com, the average hourly rate for a freelance consultant is $41, but this will vary a lot depending on the specific kind of consulting you do.
Freelance Earnings By Country
These salaries have been aggregated from a variety of sources and converted to USD for simple comparison. The actual salary you can expect to earn in each country will vary significantly depending on lots of factors as I’ve discussed above.
Plus, some countries, such as the USA and Brazil, are huge and so there can be a lot of disparity across states and regions. Use this graph only as a guide for the rough trend to expect across the world. See my other article for more on the top freelancing countries.
There are also lots of different sources out there quoting different numbers, but the general trend will be roughly the same.
What Freelancing Skill Earns The Most Money?
Freelancers with specialized skills and expertise can often command higher rates than those with more general skills. Some of the highest-paying freelance skill sets include:
- Software development
- Web development
- Data science
- Legal services
- Marketing consulting
- Graphic design
With the right combination of skills and experience, freelancers in these fields may be able to earn six figures or more each year.
What You Should Expect To Earn As A Beginner Freelancer
The amount of money you can earn as a freelance worker will depend on the type of work you do, your experience level, and how much effort you put into finding clients. As a beginner freelancer, it’s important to understand what to expect when it comes to earnings so that you can set realistic goals for yourself.
The range of earnings can vary depending on the job and your experience level (and your location), but generally speaking, you should expect to earn between $15-25 per hour as a beginner. As you gain experience and build a client base, you should be able to increase your rates accordingly.
It’s important to note that freelance work often requires more effort than a traditional 9-5 job, so it’s important to factor in the extra time spent on networking and marketing when considering potential earnings.
While it’s true that your earning potential is limited as a beginner freelancer, it increases very quickly as you gain experience. As you become more knowledgeable and confident in your skill set, you can start to charge higher rates for your services. As you build a positive reputation with clients, you may be able to land larger projects or long-term contracts that pay more.
How To Earn More As A Freelancer
Build A Network
Building a strong network is vital for finding more clients and increasing your earning potential as a freelancer. Join industry-related websites and attend networking events to meet other professionals in your field. This can of course lead to getting potential clients, but you may be able to learn a lot from other people in your industry as well.
Take On More Clients
The more clients you take on, the more money you can earn as a freelancer. However, make sure that you’re not taking on too much work. Quality should always be prioritized over quantity when it comes to client work, as quality is what they’ll pay you for.
Offer Unique Value Propositions
In today’s competitive market, it’s important for freelancers to differentiate themselves from everyone else by offering unique value propositions to their clients. Consider what sets you apart from other freelancers and use that to your advantage.
Invest In Your Skills
Having a strong skill set is obviously essential if you want to find success as a freelancer. Make sure that you’re investing time and effort into honing your craft and expanding your repertoire of talent so that you can continue to offer more value to clients and increase your earnings.
Don’t be afraid to negotiate rates with clients. If you’re confident in your abilities to deliver high-quality results, there’s no reason you shouldn’t be able to get paid what you’re worth. Learning what you’re worth will come with time and experience, and from getting feedback from clients.
An effective marketing strategy is essential for any freelancer looking to increase their earnings. Investing time into creating a website and making the most of social media platforms can help you reach new potential clients and grow your freelancing business.
What Payment Structure To Use As A Freelancer
Charging an hourly rate is a common pricing option for freelancers. This pricing model is straightforward and easy to understand for both the freelancer and the client. Hourly rates can vary widely depending on the industry, the freelancer’s level of experience, and the location.
Hourly rates may be the easiest option for some industries, but it’s not always the right one to choose. Many people choose to start freelancing to get away from the hourly rate construct associated with traditional jobs. Hourly rates can leave you chasing higher and higher numbers for less and less work, so it may not be the right choice for you.
It can leave you incentivised to do less work per hour in order to extend your earning potential, but you’ll always be capped by the time limit with this. This can make other payment options more lucrative.
The same can be true if you price per word as a writer. You become incentivised to write as fast as you can to boost your hourly rate. However, payment per word is going to be the most common for beginner freelance writers.
Project-based pricing involves charging a fixed fee for a specific project. This pricing model is beneficial for freelancers who have a clear understanding of the scope of work involved in a project. Project-based pricing can also be attractive to clients as it allows them to have a clear idea of the total cost of the project upfront.
However, freelancers should be careful to accurately estimate the time and resources required to complete a project, as underestimating can result in lower earnings and client dissatisfaction.
By pricing it on a project basis, you’re incentivised to do the work as quickly as possible to earn the most money for your time. This can lead to a quality dip, so you need to make sure you don’t just try to go as fast as you can. Ultimately, this could lead to the project taking longer if the client requests many revisions.
Retainer-based services involve charging a fixed monthly or annual fee for ongoing services. This pricing model is common in industries such as business consulting and marketing, where clients require ongoing support. Retainer-based services can provide freelancers with a steady income stream and offer clients a predictable cost for ongoing support.
It also means you’re getting a fixed fee, usually for a fixed amount of time. This means the main incentive is to provide quality work above all else, as that’s the only way you’ll satisfy the client and hopefully keep them on board for future work. However, not all clients will be comfortable with this payment option, and it doesn’t fit all industries.
Payment Plans & Multiple Payment Options
Offering payment plans and accepting multiple payment options can be attractive to clients and can increase a freelancer’s earning potential. Payment plans allow clients to spread the cost of a project over time, while accepting multiple payment options, such as credit card payments or PayPal, can make it easier for clients to pay.
However, you should be aware of any additional fees associated with accepting certain payment options, as this can impact your overall earnings. It’s also not going to be suitable for all freelancers, as some may need a more consistent, faster payment system.
Your earnings as a freelancer will vary depending on a lot of different factors. However, you can expect to earn a decent salary in most industries as long as you’re able to provide high-quality work!