In reality, many experienced freelancers combine these models. For example, you might charge fixed prices for one-off projects, offer retainers to long-term clients, and use hourly billing for consulting or projects without a clear scope. Choosing the right pricing model is often just as important as setting the right rate.
Hourly vs project rate for freelancers
The hourly vs project pricing has been around in the freelancing space for a while. And it is more than a debate, because your choice actually affects your earning potential while doing the same work.
Hourly pricing pros
- Easy for both you and the client to understand.
- Works well when the project scope isn't fully defined.
- You get paid for additional work, meetings, and revisions if they increase the time required.
Hourly pricing cons:
- Your income is limited by the number of hours you can work.
- Clients may focus more on your hours than on the results you deliver.
- The more efficient you become, the less time you spend on projects, which can reduce your earnings.
On the flip side, as you get more experienced and proficient, your hourly rate should increase to make up for the time you saved by working more efficiently.
Project-based pricing pros
- Rewards experience and efficiency.
- Clients know the total cost upfront.
- Lets you earn more if you complete projects faster.
Project-based cons
- If the project expands beyond its original scope, your effective hourly rate decreases.
- You need a clear project brief and defined revision limits to ensure the project doesn’t exceed the original scope.
Project pricing often yields higher earnings for experienced freelancers on well-defined projects. It is important to have a clear brief, a strict revision policy, or both.
Worked example
A UX designer is asked to complete a three-page website. At $75 per hour and an estimated 20 hours, they quote a total of $1,500. The same designer, knowing from experience that this scope typically takes 15 hours once they are efficient, prices the project at a fixed $1,800.
If the project takes 22 hours:
- Hourly pricing earns $1,650 (if the client approves the extra hours).
If the designer finishes in just 12 hours:
- Fixed pricing still pays $1,800.
- Hourly pricing still depends on the number of hours worked.
- Fixed pricing works out to $150 per hour, rewarding efficiency.
Retainer vs hourly: Which pays more?
A retainer differs from hourly or project pricing because it establishes an ongoing working relationship rather than charging for one-off jobs.
How retainers work
For retainers, a client pays a set monthly fee for a defined amount of work or access to your time. For example, a client might pay $4,000 per month for up to 30 hours of design work or 20 social media designs. Retainer agreements usually last 3 to 6 months.
This is different from hourly pricing, where your income varies with the number of hours you work each month. A quiet month means low income. A busy month can also create burnout.
Retainers provide more predictable income than hourly or project work. The client must pay a monthly fee regardless of changes in work volume. You are compensated for availability and priority access as much as for the hours you work. Clients who want you available on short notice, need consistent output, or value continuity in a working relationship are retainer clients.
Here is some retainer math:
Consider two freelancers:
- Freelancer A charges $180 per hour and works with 5 clients each month, averaging 10 hours per client. They earn $9,000 per month but spend significant time finding new clients, writing proposals, and managing communication with multiple clients.
- Freelancer B has two retainer clients, each paying $4,000 per month. They earn $8,000 per month but manage only two client relationships and have guaranteed income for several months.
Although Freelancer A earns more, Freelancer B enjoys greater stability, less administrative work, and more predictable cash flow.
If a freelancer receives $4,000 each month for 20 hours of work, their effective hourly rate is $200. As they become more efficient and deliver greater value, that effective rate can increase without raising the monthly retainer.
For freelancers who want stable income and fewer clients to manage, retainers are often the most sustainable pricing model.
Value-based pricing: charge for outcomes
Value-based pricing is, perhaps, the least popular option on this list. This is partly because it requires both confidence and a proper understanding of what the client's work is worth to them. Value-based pricing means charging based on the value your work delivers to the client, rather than for the time you spend or the number of deliverables.
For example, imagine a copywriter creates a sales page that increases a company's sales by $50,000. Charging $10,000 for that work can be reasonable because the client still gains far more than they spend.
When value-based pricing works best
This pricing model works best when the business impact of your work can be measured. It is commonly used by:
- SEO consultants
- Conversion rate optimisation specialists
- Direct response copywriters
- Marketing consultants
- Business strategy consultants
It can also work for designers, developers, and other freelancers, although measuring the financial impact may be more difficult.
How to set a value-based price
Start by understanding what success means to the client and how much a successful outcome is worth to them.
For example, if a client expects your work to generate $80,000 in additional revenue, charging 10%-25% of that amount ($8,000–$20,000) may be reasonable, depending on the project and your experience.
Unlike hourly or project pricing, the focus is not on how long the work takes. Instead, the client pays for the business outcome you help create.
Because this approach relies heavily on trust, value-based pricing is usually best suited to experienced freelancers who have a strong portfolio and a proven track record of delivering measurable results.
Best pricing model for freelancers at different stages
| Pricing model |
How it works |
Best suited to |
Income ceiling |
| Hourly rate |
Client pays per hour worked |
New freelancers, unpredictable scope, consulting |
Limited by hours available |
| Project-based |
Fixed fee per deliverable |
Defined projects with clear scope |
Scales with speed and positioning |
| Retainer |
Fixed monthly fee for ongoing access |
Established client relationships, recurring work |
Predictable, scales with multiple retainers |
| Value-based |
Fee tied to the client's outcome or ROI |
Experienced freelancers with demonstrable results |
Highest potential ceiling |
The transition from hourly to project-based is the most common and highest-impact pricing upgrade most freelancers can make in their first two years. The transition from project-based to retainer requires client relationships deep enough that the client values continuity and availability, not just deliverables.
How to switch from one pricing model to another
Changing how you charge clients can feel uncomfortable, especially if you've worked with them for a while. Many freelancers worry that raising prices or introducing a new pricing model might make them lose clients. In reality, most good clients accept reasonable changes, and those who don't may no longer be the right fit for your business.
Let’s provide some templates you can use in different scenarios.
Moving from hourly to project pricing
Once you have a good understanding of how long your work takes, project pricing often becomes a better option than charging by the hour. Instead of billing for time spent, you charge a fixed price for delivering a specific outcome.
When introducing the change to an existing client, you could say:
"I wanted to let you know that I'll be moving to project-based pricing for new work from next month. Instead of billing hourly, I'll provide a fixed quote for each project so you'll know the total cost before we begin. For our next project, I'll send over a proposal showing exactly how the new pricing works."
This approach gives clients more certainty while allowing you to earn more as you become faster and more experienced.
For introducing a retainer to an existing project client
If you've worked with a client on several successful projects, a retainer can provide more stability for both sides. Rather than negotiating each project separately, you agree on a set amount of work each month in exchange for a fixed monthly fee.
A simple way to introduce the idea is:
"We've worked together on [number] projects over the past [period], and I wanted to explore whether a retainer arrangement might suit you better. For clients I work with regularly, a monthly retainer provides priority access to my time and a predictable monthly cost, rather than project-by-project invoicing. If you're interested, I'd be happy to put together a proposal tailored to your needs."
The same gradual approach works when testing value-based pricing. Rather than changing your pricing model for every client at once, try it with one new client first. Explain how your work contributes to the results they want to achieve, rather than focusing only on the time it takes. If the client accepts, you have evidence that the model fits your positioning. If they don't, you'll gain useful insight into their priorities and pricing expectations before expanding the approach further.
Trying value-based pricing
Value-based pricing isn't something you have to introduce to every client immediately. The easiest approach is to test it with one new client whose project has a clear business outcome.
Instead of explaining how many hours you'll spend, focus on the value your work will create. If the client accepts the proposal, you've validated the pricing model. If not, you'll gain useful insight into what that client values and can adjust your approach.
For more help presenting your prices professionally, see how to create a freelance rate card.
How to invoice across pricing models internationally
Your pricing model doesn't just determine how much you earn—it also affects when you invoice and how predictable your cash flow becomes.
Hourly pricing
Invoice weekly or every two weeks, attaching a timesheet or summary of hours worked.
For international clients, always state the currency clearly.
For example: 28 hours at USD $75 per hour = USD $2,100
Here are some time tracking and invoicing solutions for freelancers
Project-based pricing
A common payment structure is to request 50% before work begins and 50% when the project is completed
For larger projects, you can split payments into milestones instead. Asking for upfront payments improves your cash flow and reduces the risk of unpaid work.
Also read: Best invoicing tools for freelancers working with international clients
Retainer pricing
Send invoices on the same day each month (usually the first day) and request payment before the start of that month's work.
Monthly retainers are one of the most predictable sources of freelance income, especially when clients can pay you easily in their own currency.
Value-based pricing
Invoice the agreed project fee rather than charging by the hour. Some value-based projects also include a performance bonus or success fee if agreed business outcomes are achieved.
If you work with clients in the US, UK, or Europe, the account details on your invoice can affect how much money you actually receive because bank fees and conversion margins can eat into it. Grey provides multi-currency accounts with real US routing numbers and account numbers for USD, UK sort codes and account numbers for GBP, and IBANs for EUR. This allows international clients to pay as domestic transfers in their own currency without correspondent bank deductions.
Receiving a $4,000 monthly retainer via an international wire transfer can be expensive. The client may pay a $35 outgoing wire fee; the payment may incur $15 to $30 in fees to correspondent banks along the way; and your local bank may apply a 3% to 5% exchange rate margin when converting the funds into your local currency.
Receiving international payments with Grey works differently. Instead of sending an international wire, US clients can pay you via ACH to a US routing number and account number. This avoids outgoing wire fees, correspondent bank deductions, and forced currency conversion at your local bank's rate. Grey charges a 0.8% deposit fee (minimum $2/€2/£2, maximum $10/€10/£10), while currency conversion fees vary by corridor, with some capped at $6. As a result, you keep more of what your client actually pays.
Frequently asked questions
What is the best pricing model for new freelancers?
Hourly pricing is usually the best place to start because it ensures you are paid for the time you spend, especially while you're still learning how long projects take. As you gain experience and become better at estimating your workload, you can gradually move to fixed-project pricing, which often increases your effective hourly earnings.
How do I calculate my hourly rate?
Start with the annual income you want to earn, then divide it by the number of billable hours you expect to work each year (around 1,000–1,200 hours for many full-time freelancers). Add 20–30% to cover taxes, software, insurance, and other business expenses. Finally, compare your figure with current market rates and charge the higher amount if your experience supports it.
What is a typical freelance retainer?
Retainer fees depend on your industry, experience, and the value you provide. For example, content writers may charge $1,500–$4,000 per month, marketing consultants $2,000–$5,000, while senior developers often charge $8,000–$15,000 or more. In exchange, clients receive ongoing support, consistent deliverables, and priority access to your time.
Is value-based pricing worth it?
Yes, if you can clearly demonstrate the business results your work creates. Instead of charging for hours worked, you charge based on the value you deliver, such as increased sales, higher conversions, or cost savings. However, it works best for experienced freelancers with a proven track record and clients who understand the return on investment.
How do I raise my freelance rates?
The easiest approach is to introduce your new rates to future clients first. Once you're consistently winning work at the higher price, give existing clients 30 to 60 days' notice before increasing their rates. Many freelancers review and increase their pricing by around 10–20% each year as they gain experience, improve their skills, and build stronger portfolios.
How do I receive retainer payments from international clients?
The simplest option is for clients to pay you through their local payment system, such as ACH for US clients, Faster Payments for UK clients, and SEPA for clients in Europe. Using a platform like Grey, you can receive USD, GBP, and EUR into accounts with local banking details, allowing clients to make domestic transfers while helping you avoid international wire fees and intermediary bank deductions.
Open a multi-currency account with Grey and receive your retainer and project fees in USD, GBP, or EUR with no conversion markups or correspondent bank fees.
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