Get Paid What You’re Worth: How Independent Contractors Should Set Their Rates

As more companies integrate independent contractors into their workforces, setting the right price for your services becomes a balancing act. Ask for too little and your work isn’t valued properly, ask for too much and you might lose potential clients.

The good news is that high earning potential is within reach. According to MBO Partners’ 2024 State of Independence report, the number of U.S. independent contractors earning over $100,000 annually rose to 4.7 million in 2024—up from 3 million in 2020. With the right pricing strategy, you can position yourself among this growing group of top earners.

Tips on Creating Competitive Rates for Independent Contractors

Our free guide, How Much Should I Charge As an Independent Consultant?, can help you confidently price your services and land the right clients. Here are some key takeaways:

Calculate the Minimum Rate for Your Services

The first step is calculating a baseline hourly rate that covers living costs, business expenses, and desired profit. This establishes the minimum rate you should charge.

Then, adjust that rate based on your research, industry standards, and your unique skills. You might need to try different pricing until you find what works best for both you and your clients. Remember, your rates can change as you gain experience, learn new skills, or as demand for your services changes.

Research Your Industry and What Others Charge

To set good rates, research what others charge. Check industry reports, career websites, and professional groups to see what people with similar skills are earning. Websites like Glassdoor and LinkedIn often share average rates for different types of work.

Talking to others in your field at events or in online forums can also give you valuable information. Research helps you create a starting point based on your experience level and specific skills.

Discover: 6 Tips on LinkedIn Networking for Independent Contractors

Explore Price-Setting Factors Such as Your Expertise

Many things influence your market value, including experience. If you’ve been working in your field for many years, you can usually charge more because of your proven results. Having special skills that many clients need also lets you set higher prices.

The difficulty of your projects matters too. For example, someone who writes basic website content might charge less than someone who creates complete marketing plans. Where you live and your clients’ budgets also impact rates. Independent contractors in big cities often charge more, while the prices charged by remote workers might reflect global trends.

Take Advantage of Digital Tools and Technology

To keep up with the latest pricing trends as an independent contractor, start by using online tools and resources tailored for freelancers. For starters, you can subscribe to industry newsletters, join LinkedIn groups, and attend webinars to stay ahead of market shifts.

Looking for more insights? Use rate calculators like MBO’s Consulting Fee and Billing Rate Calculator—which factors in your location, industry, and experience to recommend competitive, realistic rates.

Sell Your Services and Communicate Your Unique Value

Once you have established a base rate, you’ll need to present it to the client. Your rate should reflect not only what you deliver but also the quality, reliability, and unique approach you offer. Clearly stating your value helps clients understand what they’re getting for their investment.

If your work consistently saves clients money or increases their sales, you can justify charging more. However, if you’re just starting out, you may need to be more flexible with your pricing. This flexibility will help you build a strong reputation over time.

See: 4 Tips to Convey Value to Your Clients and Prospects

Talk Money With These Successful Rate Negotiation Strategies

Negotiating is a normal part of being an independent contractor. Having a clear minimum rate helps you discuss prices with confidence. Be ready to explain your value with real examples of past work, results you’ve achieved, or testimonials from satisfied clients.

Sometimes, accepting a slightly lower rate for long-term projects can lead to more stable income. Other times, you need to stand firm on your rates. Either way, being clear about your pricing and what clients get for their money helps build trust.

Build Your Skills and Expertise Through Professional Development

Setting competitive rates involves being confident in the quality of your work. Investing in new skills, earning certifications, and building a strong portfolio can boost your credentials and justify higher rates.

Clients who recognize your dedication and track record of quality work are more likely to invest in your expertise. As a result, you can increase your earnings and enhance your professional reputation.

Explore: 10 Valuable Skills Independent Contractors Need to Succeed

MBO Partners Supports Independent Contractors in Finding Top Work Opportunities

Understanding your market value takes time and effort, involving research, self-reflection, and regular adjustments. Fair pricing depends on your skills, the specifics of each project, and several other key factors.

If you’re seeking more resources to guide your career growth as an independent contractor or small business owner, visit MBO’s blog for expert insights. Our content covers essential topics such as marketing, financial planning, and taxes to help you build a strong foundation for your career as an independent.