Calculate and Compare Freelancer Hourly Rates

In the age of digitalization and the flexibilization of the workforce, freelancers are becoming increasingly important. Companies of all sizes are relying more on the expertise and flexibility of independent professionals to implement specific projects efficiently and effectively. For freelancers themselves, the question often arises: How do I calculate my hourly rate appropriately, and how does it compare to the competition? This blog post is aimed at freelancers in the IT and engineering sectors who want to learn how to realistically calculate their hourly rate, position themselves in the market environment and negotiate their rate with clients.

According to the Freelancer Compass for 2023, independent experts were in higher demand than ever before and also earned above average: on average, they received 100 euros per hour. 77% of freelancers saw the hourly rate as an important factor in choosing projects.

But what exactly is behind these numbers?

How Much Does a Freelancer Earn?

Freelancers not only enjoy the freedom of self-employment but often also a lucrative income. The income range for freelancers is broad and determined by various factors such as industry, qualifications, experience, and, last but not least, the order situation.

According to the Freelancer Compass by freelancermap for 2023, based on data from over 3000 individuals, freelancers and the self-employed passed the 100-euro mark for their average hourly rate for the first time. On average, they earned 100.26 euros per hour, an increase of four euros compared to the previous year. The monthly net income has also increased to an average of 6300 euros, showing that freelancers can effectively pass on price increases to their customers. The study also shows that revenues are drifting further apart: 53% of respondents had gross revenue of over 100,000 euros in 2022. Despite the generally positive attitude, inflation and recession dampened freelancers’ mood, with lower satisfaction with the economic situation and order situation compared to the previous year.

After that, the average kept rising, up to 104 euros in 2025. According to the Freelancer Compass 2026, it stands at 103 euros in the DACH region (Germany, Austria and Switzerland) in 2026. That is a slight dip, but still above the 100-euro mark.

Composition of the Hourly Rate for Freelancers

The hourly rate of a freelancer is the result of a thorough calculation that reflects both his expertise and the accompanying costs of his activity. Each freelancer sets his hourly rate individually, based on factors such as qualification, experience, and the specific role in the project. An experienced specialist will usually demand a higher rate than a beginner because he delivers greater added value.

In addition to professional competence, freelancers must also consider entrepreneurial costs such as marketing, accounting, and insurance. These are included in the hourly rate, so companies benefit from a transparent and predictable cost structure.

The duration of the project also influences the hourly rate. For longer projects, the rate can often be set lower, as they offer the freelancer more security. The flexibility shown by a freelancer, for example regarding work location or working hours, also flows into the hourly rate design.

An important factor not to be underestimated is the working atmosphere. A positive image and good working conditions can have a favorable effect on negotiations. We at ElevateX support the placement of qualified freelancers and ensure that the hourly rate reflects market conditions and the quality of the work. This results in costs for companies that are justified by the efficiency and expertise of the freelancers.

What Are the Highest-Paid Freelancer Jobs?

The landscape of freelancer jobs is diverse, and pay can vary greatly depending on factors like skills, experience, industry, and location. Yet some areas regularly emerge as particularly lucrative. Data from the Freelancer Compass 2023 shows that certain specializations command particularly high hourly rates.

IT and Software Development

In IT, the rate depends heavily on your specialization. According to freelancermap’s Freelancer Compass 2026, the median hourly rate of IT freelancers in the DACH region is 95 euros. Depending on the field, it ranges from 90 euros in software and web development to 120 euros for SAP and ERP. Specialists in fields such as SAP can therefore demand particularly high hourly rates. The trend towards digitalization is driving demand for these skills even higher.

Consulting and Project Management

Freelancers working in consulting or project management, especially in the fields of IT, finance, and corporate strategy, can also expect above-average hourly rates. This includes business analysts, project managers and consultants. Anyone who can guide a company safely through complex projects or sharpen its business strategy is especially valuable to it.

Engineering and Technical Professions

Freelancers in technical professions, including engineers, architects, and specialists in renewable energies, benefit from the global focus on sustainable development and technological progress. Their specialized knowledge in these rapidly growing areas can lead to above-average hourly rates.

Creative Professions and Digital Marketing

Creative freelancers, such as graphic designers, video producers, and digital marketing experts, are experiencing growing demand for their services, especially in the area of digital content. While hourly rates here may be somewhat variable, freelancers with unique skills or specializations in niche markets can be very successful.

According to freelancermap’s Freelancer Compass 2023, SAP experts were the top earners with an hourly rate of 119 euros, an increase of 3 euros compared to the previous year. The field of consulting/management was on par. They were followed by fields such as IT infrastructure and development/tech/data.

Marketing/communication and engineering were in the middle range of the scale, with an hourly rate of about 86 euros.

At the lower end of the scale was graphic/content/media, with the lowest hourly rate of 72 euros.

How to Calculate the Freelancer Hourly Rate?

To calculate the freelancer hourly rate, it is important to consider all relevant costs and the desired profit. This process helps not only in pricing one’s services but also in developing a viable and profitable business model. Here is a step-by-step guide on how to calculate your hourly rate as a freelancer:

1. Determine Working Days

When calculating your freelancer hourly rate, it’s important to realistically plan how many days a year you will actually work. Not every day brings work; weekends, holidays, vacation, sick days, and training days must be considered in your calculation.

Over the year, there are 365 days. Of these, 104 days are weekends. In addition, holidays (averaging 13), vacation days (we assume 28 days), sick days (around 10 days), and days for further education (about 5 days) reduce the number of your working days.

After subtracting these days, you are left with about 205 effective working days in the year. This number is crucial for determining your available working hours and thus realistically setting your hourly rate.

It’s important to include these factors from the beginning in your planning. This ensures realistic and sustainable working conditions in your freelancer everyday life. You prevent later pressure when you would have to work on weekends and forgo vacations during good order situations.

Your work time planning at a glance:

• Calendar days: 365
• Weekends: 104
• Holidays: 13
• Vacation: 28
• Sick days: 10
• Training days: 5
• Effective workdays/year: 205

This overview helps you accurately calculate your annual working hours and determine an appropriate hourly rate as a freelancer.

2. Determination of Annual Costs

First, annual costs must be determined. These include both business expenses and personal living costs. In this example, we assume monthly fixed costs of 1,000.00 euros, which include:

When calculating your hourly rate as a freelancer, however, not only fixed costs must be considered but also important factors such as profit, social security, and unproductive time. Unlike employees who receive a workplace and social insurances from their employer, freelancers must bear these costs themselves. The difference between revenue and income, as well as the need to financially prepare for downtime such as sick days, vacations, and training, plays a crucial role.

We use two scenarios here: one for a minimum wage and one for an average wage. The minimum wage salary of 2,409.33 euros gross per month is based on Germany’s statutory minimum wage of 13.90 euros per hour, which has applied since January 2026, at 40 hours a week. According to the Federal Statistical Office (Destatis), the average wage for full-time employees was 4,851.00 euros gross per month in 2025 (excluding special payments). Both scenarios are calculated for the above-calculated 205 effective workdays in the year. Minimum wage and average salaries rise regularly (the minimum wage, for example, goes up to 14.60 euros on 1 January 2027), so use current figures for your own calculation.

In addition to the monthly fixed costs of 1,000 euros, when calculating the freelancer hourly rate, social security contributions of 21.15% on the gross salary and 30% unproductive time for activities such as customer acquisition and office organization are also taken into account, resulting in an adjusted hourly rate. The 21.15% is the employer’s share of pension, health, long-term care and unemployment insurance at the 2026 contribution rates, including half of the average additional health insurance contribution.

The hourly rate specified before adjustment is based on an average monthly working time of 136.67 hours, resulting from 205 effective working days per year. When considering an additional 30% ‘unproductive’ time spent on administrative tasks such as client acquisition and office organization, an adjusted hourly rate is calculated. This rate reflects what freelancers must actually charge per productive working hour in projects to cover their ongoing costs and achieve a reasonable income. Consequently, freelancers must charge approximately 40.96 euros for a minimum wage and about 71.88 euros per hour for an average wage.

This detailed presentation of costs and the calculation of the hourly rate clearly shows that freelancers must carefully calculate their prices not only to cover their expenses but also to achieve a satisfactory income.

How to Negotiate Your Hourly Rate: 5 Tips for Freelancers

Your calculation tells you the minimum rate you need. You still have to get the client to accept it. That is not easy right now: in the Freelancer Compass 2026, 35% of respondents said they were under economic pressure, and many are feeling price pressure. That makes good preparation all the more important.

1. Prepare for the Client and the Project

The better prepared you are, the more likely you are to get your rate. Research the company, the project and the person you will be talking to, for example on LinkedIn. Ask freelancers in your network whether they have worked for the client, how it went and what they charged. Before the meeting, set two numbers: your target rate and your minimum rate. Your calculation gives you the minimum.

2. Clarify Budget and Expectations Early

Many negotiations fail because the two sides are too far apart. Ask early about the budget, scope and duration of the project. If the client’s budget is only half your minimum rate, a long negotiation is a waste of time for both sides.

3. Explain Your Value Instead of Justifying Your Price

You are not selling your price but your contribution to the project. Use examples to show which similar problems you have already solved. Ask previous clients whether you may name them as references, and collect recommendations on your LinkedIn profile. As soon as you start justifying your rate, you hand control of the conversation to the other side. If the professional and personal fit is right, often only the details are left to settle.

4. Recalculate Your Rate for Each Project

Every project comes with different conditions. Check travel and accommodation costs, travel time and the share of on-site work. If you work remotely, many of these costs disappear. If the client asks for an all-in rate, travel and accommodation are included in your hourly rate, so you have to factor them in beforehand. Alternatively, agree on your rate plus travel expenses. If you picked up skills in your last project that help the new client, your price may reflect that. If you know what your rate is made of, you can explain it in a few sentences when asked.

5. Negotiate Firmly but Fairly

Think about who is sitting across from you: an agency, the client’s purchasing team or the department that needs you. All of them will later have to justify choosing you, so give them good arguments. Most are not looking for the cheapest provider but for the one who will get the project done quickly and reliably. The more urgent the problem is for the client, the more constructively they will negotiate. The goal is a market rate that both sides can live with. Compromise is part of it, as long as you do not go below your minimum.

Alternative: Fixed Price Instead of an Hourly Rate

Not every job suits an hourly rate. For clearly defined tasks, you can offer a fixed price for the whole project. The client then pays for the result, not for your time. If you work fast, you earn more per hour. For example, you build an API integration for which you already have templates, and you are done after two days. With a fixed price, the client pays for your know-how, not just your two days. The risk is yours, though: if you underestimate the effort, your effective hourly rate drops. So put in writing what the fixed price covers and how you will bill additional requests.

Freelancer Hourly Rate Compared to Employee Salary

The decision between hiring freelancers and permanent employees strongly depends on the specific needs of a company. Freelancers offer flexibility and specialized expertise for short-term projects (6-24 months) and are often more economical without long-term commitments like salaries and social benefits. Especially in areas with long staffing times such as IT, they can start quickly. However, their hourly rates vary, and they may offer less continuity and integration into the company culture.

Permanent employees, on the other hand, cause predictable monthly expenses through fixed salaries and additional benefits. They are better suited for long-term projects and tasks, offer stability, and the opportunity to integrate into the company culture, leading to long-term motivation through career development. However, the total costs are higher in the long run, and there is less financial flexibility.

A cost comparison shows that permanent employees can be cheaper for long-term projects or continuous work, while freelancers are more cost-effective for fluctuating workloads and sporadic projects. Additional costs for employees and administrative efforts must be considered. For a detailed comparison from a company’s point of view, see our guide to freelancer costs.

A practical example with a backend developer illustrates that employees may appear cheaper at first glance, but the total costs, including recruitment and unproductive times, must be considered. For short-term projects or difficult-to-fill positions, hiring freelancers can be more economical as they provide specific skills and are quickly available, minimizing the negative impacts of an unfilled position.

Now you can compare the hiring costs of freelancers and employees with our ElevateX cost calculator!

Conclusion

The freelancer hourly rate is more than just a price for time. It is the result of a complex calculation that takes into account many factors and forms the financial basis for independent activity. In today’s flexible workforce, freelancers, especially in IT and engineering, are a key resource for companies. The Freelancer Compass shows that the average hourly rate has stayed above the 100-euro mark since 2023. In 2026, it is 103 euros. This highlights the financial attractiveness of freelance work. In 2023, specializations in SAP and consulting achieved the highest hourly rates. Whether you get your rate is decided in the negotiation: with a solid calculation, a clear minimum and good arguments, you can go into the conversation with confidence.