Rates & business
You are a business with one employee. Run it like one.
A sustainable rate, an invoice that gets paid, taxes set aside before they're due, and a contract that protects the work. None of it is complicated. All of it is the difference between freelancing for a year and freelancing for a career.
Tool
Rate calculator
Start from what you need to earn, not from what you think clients will pay. Adjust any field and the results update.
The hourly floor is (pre-tax income + overhead) ÷ billable hours. Per-word divides that by your words per hour. These are floors, not quotes: add margin for difficulty, rush, rights, and the client's budget. Compare against the EFA rate chart and the FSP rate database.
Pricing models
Four ways to charge, and when each one works
| Model | Best for | Upside | Watch out for |
|---|---|---|---|
| Per word | Journalism, publications with fixed rate cards | Simple, industry standard, easy to compare | Punishes efficiency and heavy reporting. A 1,000-word piece with eight interviews pays the same as one with none. |
| Flat project fee | Content marketing, case studies, white papers, most brand work | Clients know the cost up front; you keep the gains from working fast | Scope must be itemized. Specify revision rounds and what triggers a change order. |
| Hourly | Editing, consulting, open-ended research, ghostwriting with unpredictable scope | Fair when nobody can predict the work | Invites scrutiny of your time; caps what skill can earn. Track hours scrupulously. |
| Monthly retainer | Ongoing newsletters, blogs, editorial strategy, a steady client | Predictable income; the client gets priority access | Define what's included per month and what rolls over. Review every six months. |
Raise your rates once a year
Give existing clients sixty days' notice in writing, state the new rate plainly, and don't justify it at length. Quote new clients at the higher number immediately. Most clients expect it; the ones who leave over a modest increase were going to leave anyway.
Invoicing
An invoice is a legal document. Make it look like one.
What every invoice needs
- Your name or business name, address, email, and phone
- The client's legal name and billing address (ask who it should be addressed to)
- A unique invoice number and the date issued
- Each deliverable on its own line: title, word count or description, agreed fee
- Payment terms from the contract (due on receipt, net 30) and the due date spelled out
- Accepted payment methods and the details for each
- Your tax ID (an EIN is free from the IRS and keeps your Social Security number off paperwork)
- A late-fee clause if your contract has one
Send it the day you file
Invoice with the delivery, not after acceptance, unless the contract says otherwise. Attach it as a PDF with a filename that includes your name, the client, and the invoice number. Ask whether the client uses a vendor portal; many larger companies won't pay anything that didn't come through it.
Chase on a schedule
Day after due: a friendly one-line reminder. One week late: a second notice referencing the contract and any late fee. Two weeks late: a note to the editor's supervisor or accounts payable with the full paper trail attached. Thirty days late: a formal demand letter stating your next step. Then take it.
Track everything
A spreadsheet is enough to start: date filed, client, piece, fee, invoice number, date sent, date paid. You'll need it for taxes, for chasing, and for knowing which clients are worth keeping.
Freelance income arrives without taxes withheld. The money in your account is not all yours, and the IRS expects to be paid as you go. Set a share aside from every payment and the rest of this is paperwork.
Self-employment tax
If your net self-employment earnings reach $400 in a year, you owe self-employment tax (Social Security and Medicare) on top of income tax, reported on Schedule SE. Half of it is deductible against your income.
Quarterly estimated payments
Because no employer is withholding, you make estimated payments four times a year, generally due in April, June, September, and January. Miss them and you owe penalties in addition to the tax. A common working rule is to set aside 25 to 30 percent of every payment; your accountant will refine the number for your state and situation.
Schedule C
Freelance income and expenses are reported on Schedule C with your Form 1040. Deductible expenses commonly include a home office that is used regularly and exclusively for work, software and subscriptions, equipment, professional memberships, research materials, business travel, and the business share of phone and internet.
Keep records as you go
A separate business bank account and card make this nearly automatic. Save receipts digitally. Note the business purpose on anything that could be mistaken for personal.
Get an accountant once it's real
When freelance income is a meaningful share of your living, an accountant who works with self-employed clients will usually save you more than they cost, and will tell you whether an S-corp election or a retirement plan such as a SEP-IRA or solo 401(k) makes sense for you.
Primary source: the IRS Self-Employed Individuals Tax Center. This page is general information for U.S. writers, not tax advice.
Taxes
Set it aside before it feels like yours
Working rule
Move a quarter to a third of every client payment into a separate account the day it lands. Pay estimates from that account. Never touch it for anything else.
Contracts & rights
What belongs in every agreement
An email exchange that covers these points is a contract. A handshake is a story you'll tell later.
The six essentials
- Parties. Your legal name and the client's, with addresses.
- Deliverables. What, exactly: form, length, number of pieces, number of revision rounds.
- Deadlines. When you'll deliver, and when they'll respond with edits.
- Fee and payment terms. The amount, when it's due, how it's paid, and the kill fee if the piece is cancelled.
- Rights. What the client may do with the work (first serial, exclusive for a period, a specified license) and what you keep.
- Expenses. Who pays for travel, transcription, and photography, and whether pre-approval is required.
Rights, in one paragraph
Copyright is yours by default. Most publications need only a license: the right to publish first, perhaps exclusively for a period, perhaps in specified media. "Work for hire" and "all rights" transfer ownership permanently and should cost considerably more. If you grant a broad license, ask for a reversion of rights after a set period. See our red-flag list for the clauses that quietly expand what you've given.
When the client has no contract
Use yours. The Freelancers Union Contract Creator produces a clean agreement in minutes, and New York's Department of Labor publishes a model contract that meets the state's statutory requirements.
Freelance Isn't Free laws
Where a written contract is required by law
New York City's Freelance Isn't Free Act (2017) and New York State's statewide version (effective August 2024) give freelancers the right to a written contract for work worth $800 or more, alone or combined over 120 days; payment by the contract date or within 30 days of completing the work; and protection from retaliation. Violations carry double damages and attorney's fees, and claims can be brought for up to six years. California, Illinois, and several cities now have similar laws; the table below lists each one. Where none applies, the same requirements are still a sound checklist.
State and city laws
Where a written freelance contract is required
At least eight U.S. jurisdictions have freelance-worker protection laws: three states and five cities. Most share a core: a written contract above a dollar threshold, payment by the agreed date or within 30 days of finishing, and protection from retaliation. Coverage generally depends on where the work is performed or where the client is located, so check the official page for details.
| Jurisdiction | In effect since | Written contract required at | Notes | Official or reference page |
|---|---|---|---|---|
| New York State | August 2024 | $800, alone or combined over 120 days | Payment due by the contract date or within 30 days of completion. Double damages and attorney's fees for violations. | NY Department of Labor |
| New York City | May 2017 | $800, alone or combined over 120 days | The original Freelance Isn't Free Act. Complaints go to the city's Department of Consumer and Worker Protection. | NYC DCWP |
| California | January 2025 | $250, alone or combined over 120 days | Covers professional services, a category that includes freelance writing and editing. Payment within 30 days of completion if no date is set. Penalties include up to twice the unpaid amount. | SB 988 text |
| Illinois | July 2024 | $500 within a 120-day period | Applies to work performed in Illinois or for an Illinois client. Payment within 30 days of completion if no date is set. | Illinois Department of Labor |
| Los Angeles | July 2023 | $600 in a calendar year | Since 2025 it covers city work that California's state law does not. Enforced by the Office of Wage Standards. | Wages LA summary |
| Seattle | September 2022 | $600 in a calendar year | Requires a written notice of terms before work begins, rather than a full contract, plus itemized payment notices. Payment within 30 days of completion if no date is set. | Seattle Office of Labor Standards |
| Minneapolis | January 2021 | $600 in a year, or $200 in a week | Contract must state the payment date; if it doesn't, payment is due within 30 days of notice that the work is complete. Enforced by the Department of Civil Rights. | Minneapolis Civil Rights FAQ |
| Columbus, Ohio | May 2023 | $250, alone or combined over 120 days | Payment within 30 days of completion if no date is set. Complaints go to the city's Labor Commission (formerly the Wage Theft Prevention and Enforcement Commission). | Columbus City Council ordinance |
Last reviewed October 2026. Laws change and thresholds differ in the details, so confirm on the official page before relying on any one of them. This is general information, not legal advice.
Benefits
The parts of a job you have to build yourself
Health insurance
The ACA marketplace is the starting point for most U.S. freelancers; premiums are deductible for the self-employed. Freelancers Union runs a benefits marketplace, and the National Writers Union offers dental and vision plans to members.
Retirement
A SEP-IRA or solo 401(k) lets you contribute far more than a personal IRA and deduct it. Automate a percentage of each payment; nobody is matching you.
Paid time off
Price it in. The calculator above assumes 46 working weeks for a reason. If you charge as though you work 52, you'll either never take the time or never cover it.
An emergency fund
Freelance income is lumpy and clients pay late. Three months of expenses is the minimum that lets you turn down bad work. Six lets you sleep.
Professional development
Memberships, conferences, and courses are deductible business expenses. Budget for one organization and one learning commitment a year.
Legal backup
Authors Guild members get contract reviews and dispute help; NWU members have a grievance committee. The dues are cheaper than one unpaid invoice.