Freelancer Costs: A Price Guide for Hiring Freelancers

There are plenty of guides online that help freelancers set their hourly rate. Companies get far less guidance, even though it is the same question from the other side: what does a freelancer cost?

There is no flat answer. Every freelancer sets their own price, and many factors play into it. In this guide, you will learn what you can roughly expect, how the hourly rate is calculated, how freelancers compare with permanent employees, and whether freelancer costs count as CapEx or OpEx in your books.

How freelancers calculate their own rates is explained in our article on how to calculate and compare freelancer hourly rates.

1. What Does It Cost to Hire a Freelancer?

The cost depends heavily on the freelancer you choose and their field. For a benchmark, look at freelancermap’s Freelancer-Kompass 2026, a survey of freelancers in Germany, Austria and Switzerland: IT freelancers charge a median of €95 per hour, with an average of €97. By field, the median ranges from €90 in software and web development to €120 for SAP and ERP.

This may sound like a lot at first. However, keep in mind that you only pay freelancers for productive hours, meaning the time they actually work. In addition, freelancers cover costs that a company carries for permanent employees, such as marketing, accounting and insurance.

The hourly rate usually also covers the freelancer’s incidental costs during the project. Agree in the contract up front on anything billed on top, such as travel expenses.

If you hire through a freelancer agency, its service is usually already built into the hourly rate you pay. In return, you skip the time-consuming search for suitable freelancers, and a quality standard is in place.

At ElevateX, you simply contact us. In a personal meeting, we clarify all the basic conditions, and within a short time we introduce you to potential freelancers for your project. We also support the collaboration and are available for questions at any time.

You can use our cost calculator to compare the costs of a freelancer and a permanent employee.

2. What Constitutes Freelancer Costs?

The following list shows what to keep in mind when you are considering hiring a freelancer. The more specific your ideas and expectations are, the more accurately the price can be calculated.

• Qualification Ask yourself what you need from the freelancer. For an IT project, do you want a junior or a senior developer? If you choose a senior developer, expect higher costs.

• Knowledge and Experience The freelancer’s knowledge and experience also shape the price. A broad range of skills matters, but expertise in your specific area matters most. So does experience from previous projects and from working with other teams and companies. This experience makes freelancers adaptable. Someone with a lot of project experience gets up to speed quickly and is productive from the start of the project.

• Team Role The freelancer’s role in the team is closely tied to their tasks and skills. If they are to lead a project, for example, they also need leadership and management experience. That can raise the hourly rate.

• Tasks What exactly needs to be done? As a rule, the more complex the task, the higher the hourly rate. Costs differ between web designers and full-stack developers, for example. The working environment plays a role too. People work more gladly and more effectively in a pleasant environment, and this also has a positive effect on the hourly rate.

• Project Duration A longer project gives freelancers more security, which can lower the hourly rate. Total costs still rise with the duration, of course. For longer projects, false self-employment also becomes an issue. You can find a detailed guide and checklist in our article on false self-employment.

• Flexibility The flexibility you expect from your freelancer also affects the hourly rate. This includes how soon the freelancer needs to start. It also covers how you work and communicate during the project: will the freelancer work remotely, or do you need them on site?

• Technical Aspects Freelancers often work with their own hardware. If you want your freelancer to use company hardware, make sure it meets the requirements. Hardware and software should handle the task without any problems. If they don’t, it can hurt the price negotiation.

• Branding How does your company come across? Do people like working for you? What do you stand for? People who enjoy working for a company are often willing to accept a lower hourly rate. The chances of working together again also go up. And with a good reputation, it is easier to find more freelancers for new projects.

• Intermediary Many companies today work with intermediaries. The advantage is that the search is usually much faster. You can also expect the freelancer you are introduced to to fit your project well. If they turn out not to fit, you can decline. For their service, intermediaries add a margin to the freelancer’s hourly rate. Ask what it covers, for example pre-screening, contracts and invoicing.

3. Why Hire Freelancers?

At first, all these points may sound like a lot of effort and high costs.

Still, freelancers can bring a lot to your business.

When freelancers pay off and how to work with them successfully is covered in our guide on how to successfully hire freelancers.

In addition:

• Costs that you carry for permanent employees do not apply to freelancers, such as social security contributions, paid vacation and training.

• Freelancers often work with their own hardware, which saves you equipment costs and often software costs as well.

• By working in other teams and companies, freelancers can additionally bring in external knowledge and experience that often provide a different perspective on things. Such intangible benefits, which cannot be directly calculated in money, should also be considered when working with freelancers.

If you compare the costs of freelancers and permanent employees, they are often less far apart than you might think.

4. Freelancer Costs vs. Costs For Permanent Employees

Permanent employees shape company culture, especially as they grow into their role and get to know the company. For productivity and growth, though, that is not always enough.

On top of that, finding the right people remains hard, especially in IT. According to the German digital association Bitkom, Germany is currently short of 79,000 IT specialists. The gap has narrowed considerably since 2023, but 97 percent of companies with IT positions have difficulty filling them (as of September 2026). That is why many companies add freelancers to their teams.

How much does hiring a new employee really cost?

When comparing freelancers and in-house employees, it is often overlooked that an employee costs much more than their base salary. According to Germany’s Federal Statistical Office (Destatis), employers paid an extra €29 in non-wage labor costs for every €100 of gross earnings in 2025, for example for social security contributions and continued pay during sick leave. On top of that come costs for recruiting, onboarding, workspace and equipment.

Freelancers, on the other hand, are only paid for the time they work for you. Social security, training and paid time off are not added on top. Freelancers factor these costs into their hourly rate.

Freelancer vs. Full-time employee: A cost comparison

Even though an hourly rate of around €95 for an IT freelancer may seem high at first glance, it comes without the hidden extra costs of a full-time employee.

If you simply divide the annual salary by the contractual working hours, you underestimate the true cost of a full-time employee. Vacation, public holidays and sick days are paid but not worked. Each hour actually worked therefore costs more than the simple calculation suggests.

Whether a freelancer pays off depends mainly on the length and workload of the assignment. For short or highly specialized tasks, a freelancer is often more economical than a new position. For permanent tasks with a steady workload, a full-time hire can pay off.

Additional benefits of hiring a freelancer

Many of the hidden costs of permanent employees therefore do not apply to freelancers. That makes it easier to work with them at short notice. There are further benefits to consider:

• Knowledge Transfer Freelancers bring a fresh perspective and new ideas to a company’s problems. If onboarding and offboarding are done right, their knowledge stays with your team after the assignment ends.

• Flexibility Working with freelancers lets you respond quickly to bottlenecks and adjust the size of your team to demand.

• Being prepared for the skills shortage Skilled workers remain scarce. Freelancers help you keep growing, even when not every position can be filled permanently right away.

5. CapEx or OpEx: How Are Freelancer Costs Recorded?

Besides the price, procurement often faces a second question: which budget pays for the freelancer? To answer it, you need two terms from finance, as defined by the Corporate Finance Institute:

• CapEx (capital expenditure) is spending to acquire or improve long-lived assets, such as machines, IT systems or your own software. It is capitalized on the balance sheet and depreciated over time.
• OpEx (operating expenditure) covers the ongoing, day-to-day costs of running the business, such as staff, rent, energy or maintenance. It is expensed immediately and reduces profit in the year it occurs.

Are freelancer costs CapEx or OpEx?

In most cases, freelancer fees are OpEx. Your company records consulting, operations, maintenance or day-to-day project work as operating expenses. The costs hit profit in the same year, much like salaries. The difference: a freelancer fee only runs while the assignment does, whereas a permanent position is set up to last.

It can be different if a freelancer helps build an asset your company will use for years, such as its own software. Their fees can then count toward the production cost of that asset under certain conditions and be capitalized. Under IFRS, development expenditure that meets specified criteria is recognized as an intangible asset, while research expenditure is expensed (IAS 38). The German Commercial Code (HGB) explicitly counts the use of services as part of production costs, but not research costs (Section 255 (2) HGB). For self-created intangible fixed assets, it gives companies a choice: they may capitalize them, but they do not have to (Section 248 (2) HGB). For German tax purposes, however, self-created intangible fixed assets may not be capitalized (Section 5 (2) EStG).

Whether a project is capitalized therefore depends on the accounting framework and the project phase. The contract can matter too. One key question is who bears the risk if the development fails: your company or the contractor (Flick Gocke Schaumburg, in German). Your accounting team or tax advisor makes that call, not procurement.

You sometimes hear that recording freelancers as CapEx makes them cheaper or protects your cash flow. That is not quite right. You pay the invoice either way when it is due. The classification only changes when the cost shows up in the income statement: immediately as OpEx, or spread over several years through depreciation as CapEx.

What this means for you as a client

• Clarify the budget early: Before you engage a freelancer, ask your finance team which budget pays for the assignment and who needs to approve it. If the work is to be capitalized, have your accounting team review the contract first.
• Document work in a traceable way: If a project is to be capitalized, accounting must be able to separate development work from research and maintenance. Agree on activity reports per work package.
• Keep the investment mindset: However the costs are booked, ask what stays after the assignment: code, documentation and knowledge in your team. Plan the handover and knowledge transfer from the start.

6. Getting the Most from Working with Freelancers

The cost structures of freelancers and full-time employees are very different. A full-time employee costs more than just their salary and comes with a lot of hidden costs.

Freelancers often bring advantages to the company that cannot be calculated in terms of money and costs. Flexibility, external knowledge, and new skills and experience are just some of them. In accounting, freelancer costs are usually operating expenses. Only when freelancers help build a long-lived asset is it worth checking with your finance team whether the costs can be capitalized.

Our experience and customer success stories highlight that hybrid teams of permanent employees and freelancers can bring significant value to the company. Hybrid teams combine the benefits from both worlds and bring variety to the company’s collaboration.

If you’re eager to learn more or start building a successful hybrid team, ElevateX is here to help you and provide guidance. You can start by simply booking a free consultation call and we at ElevateX will assist you in finding the right solution at the right time.