Freelance RateSetting a rate as a software developer
How this work is usually priced, where the unpaid hours hide, and a worked example you can change to your own numbers.
How this work is priced
Developers move between hourly work, day rates and fixed-price projects. Fixed prices look attractive to clients but the time needed is hard to predict, so a buffer matters more here than in most trades.
The unpaid work
Hours that no client pays for here include estimating, meetings, code review, debugging after delivery, learning a new tool for the job, and support requests that arrive months later. They are the reason a billable share of 60% is used in the example, not 100%.
Costs to count
A fast computer, cloud and hosting bills, tools and licences, health and equipment insurance where available, and training time. Each belongs in the yearly costs box.
A worked example
These figures are made up to show the working in US dollar. Use your own.
| Take-home wanted | $90,000 |
| Business costs | $8,000 |
| Profit needed before tax and savings (28% + 12%) | $150,000 |
| Income to bill in the year | $158,000 |
| Billable hours (45 weeks, 40 hours, 60% billed) | 1,080 |
| Hourly floor | $146 |
| Day rate floor | $1,170 |
What changes the answer
- If your billable share falls by 10 points to 50%, the hourly floor rises from $146 to $176.
- If you take 3 more weeks off, it rises to $157.
- If your costs are 25% higher than you planned, it rises to $148.
A tip for this work
Add a buffer of 20 to 40 percent to your hours estimate for a fixed-price job and say what is outside the scope. Charge a higher rate for short, urgent work than for a long, steady engagement.
Try your own figures
Common questions
Day rate or hourly rate for software work?
A day rate suits steady engagements with clear hours; an hourly rate suits small or unclear tasks. Convert one into the other with the day and hour table, keeping your billable share in mind.
How big should the buffer be on a fixed price?
It depends on how well you understand the work. A familiar task may need 10 to 20 percent, a new tool or an unclear brief more. Record your estimates against actual hours and let that history set your buffer.
Keep going
Example figures on this site are made up to show the working. They are not market rates or averages. Tax, social-insurance, sales-tax and holiday rules differ by country and change, so this site does not state them: ask the tax authority of your country or an accountant. Checked 14 November 2026.