How to calculate a freelance project quote

Quoting a fixed price is a bet. You name a number before you know exactly what the work involves, and if you are wrong, you absorb the difference. The way to win that bet consistently is not to guess better — it is to build the number from parts you can defend, and to price the uncertainty explicitly rather than hoping it does not show up.

This is the method, in the order you should do it.

1. Find your actual hourly rate first

Every fixed-price quote is an hourly rate in disguise. If you do not know your floor, you cannot tell whether a project price is good or a slow-motion loss. And the floor is almost always higher than people expect, because four things eat into it.

• Unbillable time. You do not bill for sales calls, proposals, invoicing or admin. Most full-time freelancers bill 20 to 30 hours in a 40-hour week.
• Unpaid leave. Holiday, sick days and quiet weeks are all unpaid when you work for yourself. A realistic working year is 44 to 48 weeks, not 52.
• Business expenses. Software, hardware, insurance, accounting, co-working, professional development.
• Tax. It comes out of revenue, not out of the take-home figure you started with.

Work backwards from what you want to take home. Someone targeting £60,000 who divides by 2,080 hours lands at about £29 an hour. Strip out unbillable time, unpaid leave, £6,000 of expenses and a 30% effective tax rate, and the same target needs a rate above £80. That gap is the single most common reason freelancers feel fully booked and still come up short.

2. Break the project into tasks you can estimate

Do not estimate the project. Estimate the pieces. A single number for “build a website” is a guess; six numbers for discovery, design, build, content, revisions and handover is an estimate, and it is far easier to defend line by line in a conversation.

A useful discipline: if a task is longer than a day, split it further. Estimates on multi-day chunks are consistently optimistic, and the error compounds. Splitting them also surfaces the work people forget to price — project management, stakeholder review cycles, deployment, and the handover call.

Not every task deserves the same rate. Discovery and strategy usually price above production. Putting different rates on different lines is not a trick; it reflects that the work genuinely has different value.

3. Separate labour from bought-in costs

Stock photography, fonts, plugin licences, hosting, a subcontractor: these are pass-through costs, not your time. Keeping them in their own section stops them being accidentally marked up as labour and makes the quote easier for a client to approve, because they can see what is your fee and what is a cost you are carrying on their behalf.

4. Add a contingency, and mean it

This is the step people skip, and it is the one that decides whether fixed-price work is profitable over a year. Almost every project involving another human's opinion runs over. The contingency is what absorbs an extra revision round instead of your margin.

5. Sanity-check against value, not just cost

The build-up gives you a floor. It does not give you a ceiling. If a two-week piece of work will make the client six figures, a price derived purely from your hours is leaving money on the table. Ask what the outcome is worth and let that inform where above the floor you land.

The reverse also holds. If the honest build-up produces a number the client will never accept, that is information. Reduce the scope rather than the price — cutting the fee while keeping the deliverables is how a project becomes the one you resent.

6. Present it as a breakdown, not a number

A single figure invites one question: “can you do it for less?” A breakdown invites a better one: “what if we dropped this part?” That is a negotiation about scope, which you can win, rather than a negotiation about price, which you cannot.

1. 1List the tasks with what each includes.
2. 2Show fixed costs separately.
3. 3State the total, the payment schedule and what happens if scope changes.
4. 4Put an expiry date on it — 30 days is normal — so an old quote cannot be accepted at next year's prices.

Whether to show the hours is a judgement call. It makes the quote easier to approve and easier to negotiate scope against. If you are pricing on value rather than time, share the task list and the total but leave the hours out.

A worked example

A five-page marketing site for a new client. Discovery 6 hours at £95. Design 20 hours at £85. Build 40 hours at £75. Revisions and handover 8 hours at £75. That is £8,270 of labour. Add £150 of stock photography and fonts, giving £8,420. A new client with a clear scope justifies 15%, so £1,263. The quote is £9,683 — call it £9,700.

If it runs clean, the effective rate is about £131 an hour against a floor of £80. If two extra revision rounds appear, the buffer absorbs them and you still clear the floor. That is the entire point.

After the quote is accepted

Get it in writing, take a deposit — 30 to 50% is standard — and invoice against the milestones you named. A quote that turns into an invoice with the same line items is easier for a client's finance team to approve, which in practice means you get paid sooner.