Freelancers commonly set rates by comparing to a salary, which produces a number that does not work. A freelance rate has to cover several things a salary does not.
What the rate must cover
Non-billable time. Finding clients, quoting, invoicing, admin, and learning. Most freelancers bill somewhere between half and two-thirds of their working hours, so the rate has to compensate.
No paid leave. Holidays and sick days are unpaid, which removes several weeks of income.
Your own pension, insurance, equipment, software and training.
And periods without work, which happen.
The rough calculation
Take the annual income you need. Add costs – equipment, software, insurance, pension, tax provision. Divide by realistic billable hours, which for a full-time freelancer is often around a thousand rather than the two thousand a salaried year contains.
The result is usually well above the salary-equivalent hourly figure, and that is correct.
Hourly versus fixed price
Hourly is safer for open-ended work and caps your income at your hours.
Fixed price rewards efficiency and requires accurate scoping. It is generally the better model once you know how long things take, and it is how you stop being paid by the hour for expertise that saves hours.
Value-based pricing
Charging based on what the work is worth to the client rather than time spent. Works when the value is quantifiable and the client is the sort who thinks that way. Not applicable everywhere.
The most common mistake
Not raising rates with existing clients. Rates set three years ago are below market now, and clients rarely volunteer an increase.