Ultimate Freelancer's Guide: Freelancing Tips and Tricks

Freelancing provides plenty of flexibility for making money since you are not necessarily bound to a particular employer or work schedule. 

But speaking from personal experience, there is a learning curve to overcome when adjusting to a freelance lifestyle from a traditional career path. The journey is different for each person, as the process depends on your niche, goals, and current circumstances.

Table of Contents
  1. What Is Freelancing?
    1. Types of Freelancers
    2. Freelance vs. Employee
  2. Types of Freelancing Jobs
    1. Administrative
    2. App Development
    3. Coaching
    4. Delivery
    5. Graphic Design
    6. Marketing and Social Media
    7. Photography
    8. Web Design
    9. Writing
  3. Pros and Cons of a Freelance Career
    1. Pros of Freelancing
    2. Cons of Freelancing
  4. Starting a Freelance Business
    1. 1. Pick an Income Stream
    2. 2. Choose a Business Structure
    3. 3. Open a Business Checking Account
    4. 4. Apply for a Business Credit Card
    5. 5. Secure Business Licenses
    6. 6. Sign Freelance Contracts
    7. 7. Get Insurance
    8. 8. Plan for Retirement
    9. 9. Pay Your Taxes
    10. 10. Set Up Your Home Office
  5. Building a Freelance Portfolio
    1. What to Include in a Freelance Portfolio
    2. Setting Up a Website
    3. Using Social Media
    4. Networking
  6. Setting Freelance Rates
    1. Annual Salary Goal
    2. Research Current Freelance Rates
    3. Negotiate with Clients
    4. Invoicing
    5. What Happens If You Don’t Get Paid?
  7. Summary

What Is Freelancing?

Freelancing means you are self-employed or an independent contractor and don’t have a long-term commitment to a single employer. 

Historically, a freelancer would make a website, cold pitch potential customers, or advertise locally to find work. These tried-and-true methods are still effective today, but it can take a few years to scale your side hustle into a part-time or full-time income.

In recent years, gig economy jobs have become a popular way to earn instant income. Typically, you compete for one-time assignments on platforms like Upwork and Fiverr for professional services or Doordash and Grubhub to get paid to make deliveries. Depending on the platform, some clients may form long-term relationships allowing you the perk of consistent work.

Types of Freelancers

Freelancing is a very diverse term that can take on multiple meanings. For instance, do you work locally or online? Do you work for a specific company or have multiple clients?

  • Moonlighter: An individual with a full-time job who performs similar side gigs in their free time as supplemental income. For example, a teacher who tutors or a graphic designer who builds websites. These might be one-time tasks or recurring gigs.
  • Independent Contractor: Arguably the most common type of freelancing. This person offers their time and skills for multiple clients and customers. They complete most or all of the work by themselves and may not have an incorporated business. 
  • Diversified Worker: A freelancer who earns income from multiple side hustles, such as delivering meals and packages locally and also transcribing audio when at home. Building a side hustle stack makes it easier to combine your skills and earn more.
  • Freelance Business Owner: You may need to scale your business and hire other freelancers to complete various tasks or help you on job sites. For example, you might own a home repair business and hire a freelancer to help you complete the repairs and another as a bookkeeper.  
  • Temporary Worker: This arrangement typically involves signing a contract for several weeks or months to work exclusively with one company. Common situations include product launches, location openings, or filling in during peak season. 

The various forms of freelancing are growing, according to Upwork’s Freelance Forward 2022 study. For instance, approximately 39% of the total U.S. workforce performed freelance work in 2021, up from 34% in 2015. That’s 60 million Americans earning a freelance income of some kind.

Additionally, 17% of the freelancers surveyed earn both traditional and freelance income.

This study reports that 51% of all freelancing gigs are knowledge-based — tasks such as computer programming, IT, marketing, and business consulting. Unskilled labor and services like delivery gigs are the second most common, at 37%. 

Freelance vs. Employee

While freelancers and employees share many overlapping types of employment, there are stark differences. 

With freelancing, you don’t receive workplace benefits such as insurance, paid vacation, or a retirement plan like W-2 employees. Your income and payroll taxes aren’t automatically withheld, so you must set money aside for estimated taxes. 

On a positive note, you can have a more flexible schedule and can work with multiple clients without restrictions. The flexibility is one reason I enjoy freelancing; it’s the better option for balancing work and family commitments.

While you may not have a formal contract in place like you would as an employee, it’s a smart idea as a freelancer to set out the commitment period, pay rate, and expectations with a client upfront. Also, since either party can cancel at any time, you should see if there are payment guarantees. 

I recommend pursuing long-term work with a client when possible — that way you don’t need to spend all your time pitching potential clients to increase your workload or income.

Types of Freelancing Jobs

The beauty of being an independent contractor is that you can try several different jobs and clients to see which ones you prefer. Plus, you’ll diversify your income that way. 


Administrative tasks such as customer service and backend support are needed to keep a company running smoothly — and they’re often outsourced to contractors. 

Examples include:

  • Virtual assistant: Tasks vary but can include answering emails and phone calls, making social media posts, scheduling assignments and events, writing general communications, and data entry. This is a flexible job for college students.
  • Bookkeeping: This includes maintaining an accurate record of day-to-day financial transactions, paying bills, and invoicing vendors. 
  • Data entry: You can sort data collections from various websites or files. This can also include transcribing audio or video recordings. More advanced tasks may require online research.  

These can be easy jobs that pay well and you can complete from home on a full-time or part-time basis. 

App Development

If you have programming skills, you can put them to work by developing apps, chatbots, and mobile games.

This type of freelancing is usually on a per-project basis and may not have consistent long-term work with the same client — unless they want continual app improvements or you get in with a business that wants several products.


Experienced professionals may find fulfilling work in coaching or consulting. Popular consulting gigs can include:

  • Business development
  • Career coaching
  • Financial advisor
  • Fitness
  • Human resources (HR)
  • Life coaching
  • Information technology (IT)
  • Management
  • Marketing
  • Money coaching
  • Personal development

Depending on your experience level, this can be something to work towards achieving once you have an established history and are knowledgeable about the topic.


Delivery side hustles are a popular way to make money, as no special skills are necessary and you can accept or reject delivery requests. You can also join several apps to have more delivery options to choose from. 

In most cities, you will need a car to make deliveries within a reasonable timeframe although scooters and bikes are eligible in metro areas.

You earn a fixed amount based on the delivery distance and order type. Customer tips are optional but you can usually keep 100% of what you receive, although you must pay for gas, parking, vehicle maintenance, and rideshare insurance.

You can deliver the following items:

  • Food: Pick up meals at restaurants. DoorDash tends to be the busiest app in many cities, although you can also have success with Uber Eats and others.
  • Groceries: Walk the supermarket aisles for fresh produce, frozen foods, and packaged items. Instacart and Shipt are great apps with nationwide popularity.
  • Laundry: Poplin lets you earn up to $6,000 monthly by picking up laundry and washing it for the customer. This can be a unique side hustle with less competition (if handling other people’s dirty laundry doesn’t gross you out).
  • Packages: You may prefer delivering packages from distribution centers. Consider Amazon Flex, GoPuff, or Roadie for on-demand package delivery.
  • People: Transport people around town or to the airport at any time of the day or night through Uber or Lyft.

Graphic Design

It can be more affordable for companies to hire freelance graphic designers than keep one on payroll. For instance, the brand may want to pull from different designers to have a wider variety of artistic styles. 

Additionally, you may be able to include completed projects in your portfolio, so other potential customers can see your style.  

You can use a specialty platform like 99 Designs to create a portfolio but broader outlets like Fiverr and Upwork receive plenty of traffic too.

Marketing and Social Media

You can be a freelance marketing pro if you have a knack for creating content, managing marketing campaigns, interacting on social media, or launching products. You can have the flexibility of helping multiple brands grow simultaneously but with more schedule leeway than a traditional marketing position.

It’s possible to have more success in this niche by setting up a marketing agency, even if it’s just a tiny outfit.


Freelance photography can be lucrative, mainly if you can photograph special events. In particular, weddings and graduation photos. You may consider offering video filming services too if you have the skills and equipment. 

Being near a tourist destination certainly helps too, as there’s a market of travelers hiring photographers to take their photo at picturesque landmarks. 

You may also be able to create stock photos, graphics, vectors, videos, and drone footage that can be sold online through platforms like Adobe Stock or Getty Images.    

Web Design

Businesses need front-end developers, back-end developers, full-stack developers, and mobile web developers. 

This is one of the high-income skills that you can offer and still work remotely.


Freelance writing comes in many forms. As a freelance writer, you could write blog posts and short articles for websites and media outlets, or you could write books, white papers, grants, or marketing copywriting.

If you have a sharp eye for detail, editing and proofreading are other freelancing possibilities.

Pros and Cons of a Freelance Career

While making your own work schedule sounds great, there are advantages and disadvantages to freelancing.

Pros of Freelancing

  • Earn more: You are the boss and can receive extra compensation for that responsibility. Plus, you aren’t a cog in the machine for a corporation that collects the profit while workers receive a fixed wage.
  • Flexible schedule: You will still need to meet customer deadlines, but you’ll have more flexibility regarding which days and hours you work. For instance, you might work better during the evening if you care for someone or have lots of appointments. 
  • Multiple clients: Independent contractors have the liberty of working for several clients simultaneously, which diversifies your income and earning potential. 
  • Variety: Your typical workday can have a wider variety of tasks. In comparison, a traditional job may focus on the same activity day in and day out. 
  • Tax deductions: You have access to more tax deductions such as unreimbursed mileage, business-related purchases, and a home office deduction that can reduce your taxable income. 

Cons of Freelancing

  • Irregular income: With a regular job, you are more likely to have a consistent income during slower seasons. As a freelancer, you may find yourself working longer-than-desired days when work is available.
  • Pitching: Most freelancers need to pitch potential clients through emails, job boards, or networking events. This can be time-consuming and stressful. 
  • More responsibilities: You are responsible for running every aspect of your business, including pitching clients, paying taxes, invoicing customers, and hiring assistants.
  • No workplace benefits: Not having employer-provided insurance and retirement accounts or paid vacation days are the price to pay for being your own boss. There are options for standalone medical insurance and retirement plans, although your out-of-pocket costs can be higher.
  • Self-employment taxes: Your income is subject to self-employment taxes, which can be higher than traditional taxes as you are responsible for the employer portion. Figuring out your estimated tax liability and paying quarterly estimated taxes also requires more work to avoid a surprise tax bill. 

Starting a Freelance Business

Here are some of the steps to take as you develop your business plan and freelancer profile.

1. Pick an Income Stream

First decide what money-making ideas to pursue. It might be a continuation of your day job or something totally different that gives you a change of scenery from your day job.

Consider browsing the best sites to find remote work. I have used several over the years to find part-time jobs and you can find full-time income streams too. These platforms make it easier to connect with reputable companies and avoid scam job postings. 

2. Choose a Business Structure

Many freelancer businesses are either classified as a sole proprietor or an LLC. It’s also possible to form a partnership if you’re working with a co-owner.

The best option depends on your industry, annual income, state of residence, number of employees or contractors, and which legal and tax benefits you want.

Sole Proprietor

The easiest route is being a sole proprietor as you don’t need to complete any special paperwork. You can use your Social Security number (SSN) and personal banking details to receive payments and complete tax forms.

However, for identity protection, it’s possible to apply for an EIN (employer identification number), which you would then provide on business documents instead of your SSN. Additionally, an EIN is usually needed to open a business checking account.

You can request an EIN for free from the IRS. This number verifies your business identity.

Remaining a sole proprietor can be a good option if you’re just starting out and don’t earn much income or complete work with gig economy apps like DoorDash or Instacart. Just make sure to separate your personal and business expenses to accurately track your self-employment deductions.

The most significant drawback is the lack of legal protection. If you’re sued, you may need to forfeit personal assets to cover legal expenses and compensation to the creditor or plaintiff.


Incorporating as a limited liability corporation (LLC) can be a smart move when you start a business as it’s easier to separate your personal and business assets. This can be a good move even when you are a solopreneur as you can procure additional legal and tax benefits.

From a legal perspective, your personal assets are protected if somebody sues your company or when business debts must be repaid but there are insufficient funds.

Another advantage of forming an LLC is getting a Registered Agent in your home state. Your official tax and business correspondence can be sent to this address instead of your home address, which helps protect your privacy. You also comply with business formation laws that require having a qualified agent to receive such documents. 


A general partnership is the co-owner alternative to a sole proprietorship. You and any other co-owners use your personal details to fill out financial documents. This means your personal and business assets are commingled, which can create a sticky situation if you need to pay out legal claims or business debt and there isn’t enough money in the business banking account. 

With that said, there are a few partnership types that can limit your personal liability. A limited partnership (LP) and a limited liability partnership (LLP) are two common choices.   

Consider talking with a business tax professional and even a business lawyer to review the best setup for your situation. For example, you might be better off forming an LLC from a legal and tax standpoint. 

3. Open a Business Checking Account

Keeping your personal and business banking transactions separate requires more bookkeeping but prevents an end-of-year tax headache.

Opening a business banking account is easy although the financial institution will likely need several work-related documents to validate you run a freelance business. One example is your Articles of Incorporation, although the precise requirements differ by bank and state of residence.

If you’re a sole proprietor without an EIN, you might be ineligible for a business account. In this situation, you will need to stick with a free personal checking account. It’s a good idea to keep this product separate from the one you use for personal expenses to keep bill tracking easier.

A budget spreadsheet also makes it easier to track your revenue and overhead to calculate your potential profits.

4. Apply for a Business Credit Card

You may also consider applying for a business credit card to easily track and separate your work expenses from your personal spending.

You may need a good or excellent personal credit score (between 670 and 850) to have the best approval odds. Having a clean credit history is helpful for most business credit cards as many require a personal guarantee in case you default on your balance. Your personal credit is even more valuable when you’re a startup with minimum revenue or operational history.

If approved, your spending limit will be lower than that of an established business. Still, you may be eligible for credit line increases and more rewarding products down the road. 

For now, you may consider one of these starter credit cards with low minimum credit limits:

  • Ink Business Cash® Credit Card: Earn 5% cash back on the first $25,000 spent at office supply stores, internet, cable, and phone services each account anniversary year; 2% cash back on the first $25,000 spent at gas stations and restaurants each account anniversary year; 1% cash back on all other purchases, redeem points for cash back or travel, and pay no annual fee.
  • Capital One Spark Cash Select for Excellent Credit: Earn unlimited 1.5% cash back on every purchase, redeem your rewards for cash back or as a statement credit, and enjoy no annual fee.   

If you don’t feel that it’s an opportune time for a business credit card, you can also start with a personal card. This is suitable if you have minimal expenses — but it’s still best in this situation to use the card exclusively for business spending to make your bookkeeping easier.

5. Secure Business Licenses

Depending on your vocation and state of residence, you may be required to get business licenses and permits. These requirements are more likely if you operate locally than if you have an online work-from-home job.

Inquire with your local and state government to see what’s necessary to remain legal.  

Select occupations are more likely to require a license or special certification. Popular examples include:

  • Accountants
  • Cosmetologists
  • Financial advisors
  • Home repair experts (i.e., contractors, electricians, plumbers)
  • Landscapers
  • Mechanics

Federal permits may also be required for selling agricultural goods, animal transport, and alcohol. 

6. Sign Freelance Contracts

It’s always smart to have a business agreement with clients and co-owners in writing. Include key aspects such as job responsibilities, pay rate, non-disclosure agreement, and how long the deal remains in effect. 

A basic email or Microsoft Word document suffices for a casual working relationship, but you will want a formal contract for professional situations. 

There are many places to find contract templates online for free or at minimal cost. These documents hit the highlights and are easy to modify. A premium service like DocuSign is better when you need customization or electronic signatures.

7. Get Insurance

You will need to verify you have adequate personal and business insurance coverage. Some products to consider getting quotes for include:

Commercial Insurance

This is a must if you have a physical location or commute to a customer’s site to complete tasks. An insurance agent can provide a quote and recommend what coverage benefits you need for your line of work and business volume.

Auto Insurance

You may need to add rideshare insurance to your personal car insurance policy if you deliver on a part-time or full-time basis. 

Order delivery and sharing economy apps usually provide coverage while you are actively making deliveries but there can be coverage gaps while waiting for your next assignment or driving to the pickup location. Purchasing additional coverage prevents gaps.

Tip: Insurance comparison websites can help you get competitive premiums. It’s worth comparing rates if it’s been a few years since you opened a policy, as carriers don’t always award the lowest premiums to loyal customers.

Health Insurance

Medical insurance is one of the most expensive costs for full-time freelancers. Compare rates, coverage amounts, and deductibles to get lower premiums.

Obtaining coverage from your state’s health insurance exchange or can be the most convenient option. Individuals with limited incomes are eligible for credits to offset the full-price premium. Select plans are eligible for health savings accounts, which allow participants to save for future medical expenses with tax-deductible contributions and tax-free withdrawals.

Freelancers Union partners with several providers to provide competitive rates and coverage. It’s free to join this union, and other benefits include resources to help new and experienced entrepreneurs succeed.

Health-sharing plans and short-term insurance are also worth pursuing although these are not traditional insurance products and have coverage limitations. 

Life Insurance

If you’re exiting the corporate world and only have group life insurance as an employer benefit, you will need a standalone life insurance policy. An adequate policy can cost below $20 per month depending on your age.

Your monthly premiums can be affordable and provide financial peace of mind in case your survivors are stuck with a pile of bills or need to find a way to offset lost income. 

Disability Insurance

You may consider buying disability insurance in case you cannot work for some time due to injury or illness. You won’t have paid sick days or workers’ compensation to pay for your missed time and this benefit helps offset lost income until you get back on your feet.

8. Plan for Retirement

Independent contractors don’t have access to workplace retirement plans where the employer may make matching contributions. It’s up to you to save for retirement with an individual retirement account (IRA).

A Roth IRA can be an ideal option as you can make tax-free withdrawals in retirement. Consider a traditional IRA to make tax-deductible contributions by paying taxes on the distribution amount instead.

Depending on your business formation structure (LLC, corporation), you can be eligible for a SEP IRA or a Solo 401(k) that has higher annual contribution limits. 

In time, you may decide to hire a financial advisor to help manage your nest egg so you can focus on growing your business. There are also one-time advice packages where you can speak to an advisor during the business setup phase, which is helpful for opening the best tax-advantaged accounts immediately.

Tip: Don’t forget about your old 401(k) and roll it into your new retirement account. These funds are still available to you and moving your account lets you adjust your asset allocation and track your goal progress.

9. Pay Your Taxes

Freelance income exceeding $400 is subject to self-employment taxes. The federal self-employent tax rate is 15.3%, which includes your Social Security and Medicare payroll tax contributions. W-2 employees pay half this amount as the employer covers the first half. 

Your total annual income is also subject to the federal income tax brackets minus the standard deduction (unless you can itemize) and other tax deductions or credits you’re eligible for.

Business Tax Deductions

Popular business-related tax deductions you might be able to claim include:

  • Business licenses and certifications
  • Continuing education
  • Home office
  • Membership dues
  • Office supplies
  • Phone and internet
  • Post office box
  • Software (i.e., Quickbooks, Office, Grammarly, Adobe)
  • Travel and lodging
  • Unreimbursed miles driven with a personal vehicle

These expenses must be ordinary and necessary to claim.

Estimated Taxes

Getting in the habit of paying estimated taxes each quarter helps you avoid an expensive tax liability when filing your tax return. For example, you find out you owe $10,000 when you hoped to only pay $2,000. 

These recurring payments can also prevent a year-end penalty if you don’t contribute enough throughout the year. Calculating how much you owe to avoid a surprise tax bill is complicated, but several calculators exist. Your tax accountant can also assist in these calculations.

Filing Business Taxes

Most tax software files self-employment income using a Schedule C tax form and provides ongoing support for the rest of the year. 

Hiring an accountant or a CPA can be better for complex tax situations to avoid potential mistakes and find overlooked deductions. It’s how I’ve been preparing my taxes the entire time I have been self-employed. Yes, you pay a tax prep fee that’s pricier than DIY tax programs, but you have another set of eyes on your numbers who can also answer your tax questions.

Related: How To Get a Bigger Tax Refund

10. Set Up Your Home Office

You may need a full-time workstation and that can mean converting a spare bedroom or a corner of your living room into a home office. 

At a minimum, have a large and sturdy desk with plenty of space for your computer and a writing surface. You may also want to ensure you have room for a mouse (just using the trackpad can be a nuisance long-term) and an external screen to reduce eye strain. 

Reliable, high-speed internet is also a must. In addition, be sure to invest in a comfortable, ergonomic chair and have ample lighting. 

If you can work anywhere, you may want to be able to pick up and go easily. For example, I used to work out of our local library a few days each week and had a computer bag that I could easily transport. I also realized how valuable a high-quality set of headphones can be to block out distractions.

Building a Freelance Portfolio

Along with the behind-the-scenes work such as obtaining licensing and setting up spending accounts, building a stellar freelance portfolio is essential for finding clients. 

You can take several paths to build your portfolio. Which direction you choose depends on your niche and target client but consider trying several platforms to get more exposure.

What to Include in a Freelance Portfolio

You don’t need to be a marketing wizard or have a bottomless advertising budget to build a portfolio, although you will need to be confident and honest to make a compelling first impression.

Some items for your portfolio include:

  • Background: Provide a brief bio regarding your relevant skills and work history. 
  • Interests: List what tasks you are interested in helping clients complete.
  • Work samples: Clients want to see previous projects. You can upload writing samples, images, and videos or link to your publisher bio pages from websites or freelance platforms where you actively work. 
  • Testimonials and references: If you have any customer referrals, you can include these to help build trust. 

Consider saving templates and portfolios as Google Docs so you can easily share the read-only link with potential clients and businesses. I also saved PDF copies of previous work that I could easily upload with online job applications or send in an email.

Be personable and provide plenty of detail so the potential client can get a feel for your personality and content style. For example, I have had several prospects send me messages with a message similar to, “I saw your work on this site, and I like your writing style…”.

I also recommend putting your portfolio on various freelancer marketplaces so you have more avenues to reach clients. Personally, Upwork has been my most successful place at finding freelance work. The pay potential isn’t necessarily the highest, but it’s income, you gain experience, and have a portfolio to share. 

Other platforms that you can try include:

  • CarbonMade: For artists, architects, graphic designers, and photographers to present their work and connect with brands.
  • Contently: Create a freelancer portfolio and bid on assignments with businesses from many sectors. This is an excellent platform for writers and videographers who possess several years of relevant experience.
  • Fiverr: An online platform for most online side hustles. You can create a profile for free but must wait for customers to buy a gig package to start working.
  • FlexJobs: This is one of the best platforms for finding remote work as it vets postings for small and large companies. You can find part-time and full-time work for several niches, but specifically customer service and data entry.
  • Guru: A general website where customers post jobs for different tasks and you can send a price quote. Many gigs are for images, computer programming, and data entry.
  • JournoPortfolio: A platform for artists, authors, beauticians, copywriters, journalists, and photographers to create a free or premium portfolio. There is also a feature to hide your portfolio from your employer and search engines.
  • ProBlogger: A job board for blog writers and copywriters. Openings are available on a freelance and contract basis.

Setting Up a Website

A dedicated website can help you establish an online presence and is an easy way to add a layer of credibility. You can also link to your site in your social media channels and freelancer portfolios.

Wix is one of the best free website services as it has several customization tools. You must buy a premium subscription plan for more features and extra storage space.

Your business website may be barebones and provide basic details about what services you offer and your contact details, such as an email address. Be sure to add photos or videos of your work samples. 

You can also start a blog that can eventually turn into another income stream through affiliate marketing, ads, and partnering with products or services you trust and recommend.

Routine content production can also help you rank for competitive keywords in search engine queries that can ultimately lead to making money.

Building a social media presence can also help you reach potential clients, interact with customers, and spot new opportunities. You can join many platforms, and the best one depends on your industry and how well you interact with other users.

I suggest creating accounts on several and seeing where you gain traction. Try joining groups or connecting with others, and post content regularly to expand your reach.


Who you know is also pivotal in finding freelance work — a colleague or current client may share your name with a potential customer. 

One way to build a network is to connect with others within your niche by interacting on social media or their blog. For instance, I would leave comments on other personal finance blogs and social media pages. Eventually, a few of us sent emails and would collaborate by writing guest posts and passing along job openings.

You can also connect at conventions. One conference I had success at is FinCon, which is an excellent place for anyone involved or interested in personal finance to rub elbows.

While it takes time to build a network, the long-term outcomes can be more productive than cold pitching or applying for openings where you are a stranger hoping to stand out from the competition. Within a network, you have the advantage of word-of-mouth referrals.

Setting Freelance Rates

Knowing how much to charge can be tricky.

Your income potential is higher than working for an employer as you don’t have a boss or shareholders requiring a profit share. But overcharging may cause you to miss out on clients with a limited budget. 

Simultaneously, you don’t want to undercharge as you may struggle to pay the bills or not charge enough for your experience level. Further, freelancers don’t have workplace benefits like insurance or retirement savings so you need to charge more to have sufficient take-home pay.

When you first start out, focus more on getting clients than maximizing your pay. Getting those first few clients is worth more than negotiating for top rates. You’ll make connections, build your portfolio, and most importantly, build confidence.

Once you have a few clients under your belt, you can begin to increase your rates.

Annual Salary Goal

When deciding what you want make, you’ll need to consider a few items, mainly taxes and expenses.

Let’s say you want to replace your income from your previous job where you made $70,000 gross annually. To replicate this income, you’ll need to consider self-employment taxes, which are 7.65% of your income. So the equivalent in self-employment income would actually be $75,800 gross annually. ($75,800 minus $5,789.70 in taxes would equal $70,001.30)

Then you’ll want to add in any business expenses you have. Let’s say you have $6,000 a year in expenses (subscriptions, equipment, mileage, etc.). In this case, you’d actually need to earn $81,355 to earn the same income as you did from your job.

Once you know how much you want to earn for the year, divide it by 12 to get your monthly income goal. Let’s say you want to gross $81,800 per year. Divided by 12, you would need to earn $6,817 monthly.

Unless you’re a machine, you can’t work 24/7, so you will need to break down that income goal into the number of working days per month or week to see how much you need to make on an average day or hour.

You can compare your goal to current job openings and published pay ranges for your industry to see if your desired income is realistic.

Learn More: Average Income in America

Research Current Freelance Rates

I recommend searching the internet for freelancers’ earnings in your niche. You can also ask trusted colleagues for a range of their earnings. Depending on the industry, you may get paid a fixed amount per project, while others pay an hourly rate.

There will be a broad range, and you will typically charge less when you’re a beginner or working for smaller clients. 

Experienced freelancers can charge more. You can also earn more by working for big brands that are household names and have a worldwide audience and extensive budget. 

Personally, I find that you can earn more by working for clients that you connect with through email or networking than from freelancer sites like Upwork or Fiverr. 

Don’t get me wrong — I’m grateful for getting my start freelancing on Upwork. However, the typical client wants to pay pennies while you can easily earn at least triple for similar work. Additionally, some freelancer platforms have expensive fees that reduce your earnings even more.  

You will be competing against freelancers from around the world, including some who have a significantly lower cost of living and can thereby charge less and still pay the bills. 

Charge what’s fair for your experience level and region. A high-quality portfolio makes it more likely you will get the job, as business owners are willing to pay more for quality work. 

Helpful tip: Many freelancers earn a variable income, especially in the beginning, and some months can be busier than other seasons. I recommend making a budget to plan your basic monthly expenses and forecast how much to save when you have extra income. 

Negotiate with Clients

Knowing the industry’s average rate helps you determine where to set your rate. Depending on the client, you can also ask about their budget and what they are hoping to pay. This tactic may help both of you reach a compromise.

Additionally, consider increasing your rates if you are continually receiving offers or have plenty of work. You won’t get an automatic 3% pay raise like a traditional employer may offer, so entertaining offers from new clients is a proven way to increase your annual income and work for bigger outlets.

You can also quickly find freelancing gigs using the Steady App with competitive payout and flexible hours.


In most cases, you will use accounting software or a digital wallet to create invoices and get paid per project, weekly, or monthly.

Two digital wallets with invoicing features include:

  • PayPal: As one of the oldest digital wallets, this app lets you create invoices and receive payments from around the world. You can transfer your proceeds to a linked bank account.
  • Square: A leading PayPal alternative, you can send invoices and also receive a complimentary credit card reader to collect in-person card payments. 

PayPal and Square are very popular as the platforms are easy to use and don’t charge monthly fees like a full-service invoicing service can. 

However, you may need to use invoice software when you need more customization, bank app integrations, or a professional appearance.

Some of the best invoicing software include:

  • FreshBooks
  • Intuit QuickBooks
  • Xero
  • Zoho

Each service has unique benefits and pricing. Except for Zoho, the rest don’t have a free monthly plan but you can enjoy a free trial to see if it’s a good fit.

Some clients will enroll you in a direct deposit service like Gusto. If so, you can provide your banking details to receive payment but usually send a Word or Excel invoice to your client at scheduled intervals.

What Happens If You Don’t Get Paid?

Inevitably, a client or customer won’t pay an invoice. This is a risk, but there are several safeguards you can take to prevent this situation:

  • Send an email: Start by sending an email or two if a pending invoice goes unpaid for too long. It’s possible that the notification got lost or an urgent situation occurred. When on a freelancer platform like Upwork, you can notify the platform to investigate as most gigs have guaranteed payment protection.
  • Have a written contract: Having a written agreement that discusses the pay rate and payment schedule can avoid questions, delays, and disputes.
  • Schedule payment milestones: Instead of waiting to send an invoice at the end of a lengthy project, you may seek to get paid by completing project sections. For example, you send a weekly invoice or after completing a certain number of tasks.
  • Consider legal action: Legal action is usually too expensive to pursue, but it might be worth it for high-income projects or an extensive breach of contract. 

In any case, do not continue to work for a client who is not paying. While it may be tempting to believe they will catch up, any honest client will not expect you to keep working if they have past-due invoices.


Setting up a successful freelance career takes time as you build a client base and increase your proficiency. A well-developed plan and adapting to future changes can help you maximize your income potential from the first day. 

Being flexible, having multiple income streams, and being willing to try different things are three secrets of success.

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