It’s popular to assume that Upwork and other freelance websites are a mess of low hourly rates. Is it true? Let’s find the average hourly rate on Upwork and see for ourselves!
How I did it: there is no way to find the exact hourly rate of each freelancer besides checking every single 12 million of them.
As I was researching a way to approach it, I discovered that Upwork only shows about 1.29% of all the freelancers on the platform (about 155,000 freelancers or so) when I used their search function as they “only” show 500 pages with an average of ten freelancers on each.
Even if I had manually gathered all the numbers it would only represent a little over 1% of the entire freelance market on Upwork.
I could have randomized the numbers to give you some average but it wouldn’t be accurate. The next best is for us to look at how often each of Upwork’s hourly rate-ranges is picked by a freelancer. It shows us how much competition is within each price range for each service. Upwork has grouped them this way:
- $10 and below
- $10 – $30
- $30 – $60
- $60 and above
I was able to manually gather the data for each of the top twelve main skill categories (accounting, programming, design, marketing, etc.).
This isn’t perfectly accurate in terms of statistics but if you are a freelancer looking to understand which rate you should charge, this will give you a good overview, quickly.
Another challenge with this project is that freelancers can choose to have a general profile with one price and a specialized one (or multiple) for specific projects with another price. And they can change their rates whenever they want.
How popular is each hourly rate on Upwork?
Here are the most common rates for each of the twelve main skill categories… *drum roll please*.
Accounting & Consulting
Data Science & Analytics
Design & Creative
Engineering & Architecture
IT & Networking
Sales & Marketing
Web, Mobile & Software Dev
What surprised me the most was how popular design, sales/marketing, writing, and programming type services were. The maximum freelancers that could be displayed for each category would be 20,000 freelancers (5,000 in each price range). All of the categories above were maxed out except for writing and sales/marketing that were 90% “full”.
That means there is a lot of competition for the highest pricing tier (above $60/h) which is contrary to popular belief. Competition is a good sign that there is money to be earned so don’t think that there wouldn’t be room enough for you as well.
For reference, the least popular services with an hourly rate above $60/h were admin support, customer service, translation, and engineering and architecture – all with less than 10% each.
How to pick your hourly rate on Upwork
No doubt there are many ideas on how to do this. I’ll share three techniques to help you get started quickly. You’ll want to pick something fast, move on and upgrade it later. Don’t get stuck here.
A reader shared that he simply picked a project fee instead of an hourly rate to start, in order to create less risk for the client. That’s another way to approach but I don’t recommend it for your first project. It can backfire and you might end up spending a lot of free time and hate yourself for it before you how long a project will usually take.
Use the average hourly rate on Upwork for your service
The easiest approach is to pick the hourly rate based on the most popular price ranges for your service (see the data above). As long as you are comfortable charging that rate you are good to go.
Surprisingly this is a common challenge for new freelancers. So if not, don’t get stuck and pick one of the methods below. You can always change it later.
Use the rate from your last job
Take your monthly salary after tax and divide it by 160 hours (if you work 40 hours/week and 20 days/month like most people). Then multiply it by 2.5 to cover tax, insurance, holidays, etc. that clients aren’t paying for but your former employer was.
Here are some examples for your convenience. For example, if you earn $5,000 per month your freelance hourly rate could be $78/h but of course, it has to be what the market will pay, so you might want to compare it with other freelancers doing something similar.
Find a number you don’t hate
If I started saying a number like $100/h and kept decreasing it to $50/h, $10/h, and so on, you would eventually reach a number where you feel that it isn’t worth the work.
Pick that number and go a bit higher, so it is meaningful to you yet doesn’t feel overwhelming.
Increasing your rate in the future
Switch to project-based fees
One of the easiest ways you can increase your rate is to become more effective at your service, create templates to spend less time and charge by the project rather than by the hour. That way you’ll earn the same but spend less time on it.
For example, if you charge $50/h and your typical project takes 10 hours, you’ve earned $500. If you charge that as a project fee instead of hourly but you find a way to work faster, you might be able to get the same work done in five hours.
That way your hourly rate just went up from $50/h to $100/h even though the client is paying the same.
Increase your rate after the first successful project
Another technique is to first agree on a lower rate to get the client but before starting the first project, agree with them to move on to a higher rate after one successful project.
The key here is to point it out before the first project starts. You might say something like
I’m excited about your project and I think I can do a great job. I can offer you a discounted rate of X and when you are really happy with the results I’d like to talk about potentially going back to my standard rate of Y.
If you offer a discounted rate, they need to offer something as well. Don’t just agree to the discount without suggesting other ideas — negotiation is a dance. And it’s a great idea to come up with a good reason, so they don’t feel like you are just giving them a discount just because they asked.
There are many more techniques and I’ll share them with you in another post. If you are interested, sign up for new freelance guides via my newsletter and you’ll get a notification when that article is published.
My take on doing free work
Doing free work is a popular topic and everyone has their own opinion on it. So many freelancers get taken advantage of because we all have this belief that we might have to do free work at first to gain experience.
It’s a shame because it isn’t true. Of course, you need the experience to be good at what you do, but you don’t need to take some random project on Upwork to get your first five-star review.
My take is that you can do all the free work you want IF the client is ALREADY paying you. That way you know how good of a fit you are together and it will go along way to get you more projects in the future. By then, you can think of it as client servicing or marketing for your business.
The difference is that when the potential client is not committed to you and the project with money, they can be as flaky as they want and disappear whenever they want.
When that happens, you spent a lot of time for nothing with no review – whether it benefitted the client or not (they might leave halfway through so it doesn’t benefit any of you).
It happened to me a few times back when I was new. Another point of view is: why would we offer free work to someone, hoping that they might be able to pay us in the future?
We wouldn’t gain anything because if they can’t pay us, how can we earn money with them in the future? There are plenty of good clients out there that are happy to pay you well for doing good work.
- It’s easy to get stuck picking your freelance rate but it is fine to pick something “good enough” and move on. You can always change it later
- All the information we need to calculate the real average hourly rate on Upwork isn’t available publicly. The next best thing is to look at which hourly rate range is the most popular for your type of service on Upwork