Short answer
A freelance quote is estimated hours times your real hourly rate, plus project costs, plus a contingency for scope creep. Example: 40 hours at $86.38 is $3,455.20; add a 15% contingency ($518.28) and $120 of stock assets for a quote of $4,093.48. The template lists scope, price, terms and expiry date.
- Quote = estimated hours x hourly rate + direct costs + contingency on the labour.
- Worked 40-hour project at $86.38 an hour with 15% contingency and $120 of costs: $4,093.48.
- If that fixed-price job takes 50 hours, you earn $79.47 an hour; at 32 hours, $124.17.
- Every quote needs scope, exclusions, price, payment terms, revision limit and an expiry date.
On this page
- How do I price a freelance project?
- Step 1: start from your real hourly rate
- Worked example: quoting a 40-hour project
- Fixed-price vs hourly: what happens when the job runs over?
- What is the proper format for a freelance quote?
- Common freelance quoting mistakes
- Quote template options: Word, PDF, apps or a spreadsheet?
- Excel and Google Sheets formulas for a project quote
- How much should I charge for a 500-word article?
- Step-by-step
- FAQ
How do I price a freelance project?
Estimate the hours, multiply by your real hourly rate, add costs you will pay for the project, then add a contingency for the work you cannot see yet. That is the whole formula:
Quote = (estimated hours x hourly rate) + direct costs + contingency
The hourly rate is the part most people get wrong. If it comes from a salary divided by 2,080, every quote built on it is too low before you add a single line. The rate has to cover tax, business expenses and the hours you cannot bill - the freelance hourly rate guide works that out in full.
Contingency goes on the labour, not on pass-through costs, because labour is where estimates slip. This example assumes 15%. Treat 10-20% as a range to test against your own past overruns; widen it for vague briefs and narrow it for work you have done many times.
Step 1: start from your real hourly rate
Before you quote, know the lowest rate that still meets your income goal. Enter your own numbers here; the quote example below uses the result.
Worked example: The hourly rate behind the quote: $70,000 take-home, 25 billable hours a week (assumptions - use yours)
| Item | Value |
|---|---|
| Business expenses a year (input) | $6,000.00 |
| Tax reserve % (input) | 25% |
| Billable hours a week (input) | 25 |
| Working weeks a year (input) | 46 |
| Target margin % (input) | 0% |
| Take-home income you want (input) | $70,000.00 |
| Revenue needed | $99,333.33 |
| Billable hours a year | 1,150 |
| Hourly rate to charge | $86.38 |
| Day rate (8 hours) | $691.01 |
| Naive rate (income / 2,080 hours) | $33.65 |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
With these assumptions the floor is $86.38 an hour, or $691.01 for an 8-hour day. Quoting below that means the project pays less than your plan, even if the client says yes quickly.
Worked example: quoting a 40-hour project
Break the project into phases, estimate each one, and price the total. Here is a website redesign estimated at 40 hours (the phase hours, costs and contingency are assumptions for illustration):
| Line | Working | Amount |
|---|---|---|
| Discovery and brief | 4 hours x $86.38 | $345.52 |
| Design | 12 hours x $86.38 | $1,036.56 |
| Build | 18 hours x $86.38 | $1,554.84 |
| Two rounds of revisions | 4 hours x $86.38 | $345.52 |
| Launch and handover | 2 hours x $86.38 | $172.76 |
| Labour subtotal | 40 hours | $3,455.20 |
| Contingency | 15% x $3,455.20 | $518.28 |
| Direct costs (stock images, plugin licence) | At cost | $120.00 |
| Quote total | Sum | $4,093.48 |
| 50% deposit to start | $4,093.48 x 0.5 | $2,046.74 |
Showing the phases helps the client see what they are buying and gives you a clean way to price changes: a new request is a new line with its own hours. Whether you show the hourly rate on the quote is your choice; showing only phase prices works too.
Fixed-price vs hourly: what happens when the job runs over?
On an hourly quote the client carries the overrun risk; on a fixed price you do. A fixed price is fine when you can estimate the hours well, because finishing faster raises your effective rate.
Take the $4,093.48 quote. Strip out the $120 of pass-through costs and $3,973.48 pays for your time. Divide by the hours the job really took:
| Hours actually worked | Working | Effective rate |
|---|---|---|
| 32 | $3,973.48 / 32 | $124.17 |
| 40 (as estimated) | $3,973.48 / 40 | $99.34 |
| 46 (contingency fully used) | $3,973.48 / 46 | $86.38 |
| 50 | $3,973.48 / 50 | $79.47 |
The 15% contingency is exactly 6 extra hours at $86.38: at 46 hours you are back at your floor rate. Past that, every hour lowers your pay. That is why the quote must spell out the number of revision rounds and what counts as a change.
What is the proper format for a freelance quote?
A proper quote says what you will deliver, what it costs, what is not included, how payment works and how long the price stands. Keep it to one or two pages.
| Section | What goes in it |
|---|---|
| Header | Your name or business, contact details, client name, quote number, date |
| Scope | Deliverables by phase, in plain words the client can check |
| Exclusions | What is not included (copywriting, hosting, extra pages) |
| Price | Phase lines, direct costs, total; any sales tax shown separately |
| Revisions | Number of rounds included and the rate for extra rounds |
| Timeline | Start date, milestones, and what you need from the client and when |
| Payment terms | Deposit, milestone payments, due dates, accepted methods |
| Validity | Expiry date, e.g. 30 days, after which the price is re-quoted |
| Acceptance | How the client says yes: signature, reply, or deposit paid |
Whether you must charge sales tax or VAT depends on where you and the client are and what you sell. That is a question for a tax professional, not this page.
Common freelance quoting mistakes
Most underpriced quotes come from one of four errors, and each one is arithmetic you can check before you send.
- A rate built on 2,080 hours. For a $70,000 goal that shortcut gives $33.65 an hour instead of $86.38. A 40-hour quote built on it is short before anything goes wrong.
- No contingency. With zero buffer, the first extra hour already cuts your rate below the floor.
- Adding profit as a markup. Multiplying by 1.20 keeps about 16.7% of the price as profit, not 20%. Divide by (1 - 0.20) if you want 20% of the price. The markup vs margin guide shows why.
- Unlimited revisions. If the quote does not cap rounds, the overrun table above is your likely outcome.
Quote template options: Word, PDF, apps or a spreadsheet?
Use a document template for looks and a spreadsheet for the math. Word, Google Docs, Canva and PDF templates produce a tidy document but leave the pricing to you. Quoting and invoicing apps handle sending and e-signatures and suit people who quote often and want tracking. A spreadsheet suits the step before that: working out a price you can defend.
| Option | Good for | Watch out for |
|---|---|---|
| Word / Docs / PDF template | A clean, branded document | Totals typed by hand; no rate logic |
| Design tool template | Visual polish | Same: layout, not pricing |
| Quoting or invoicing app | Sending, tracking, e-sign | Uses whatever rate you type in |
| Spreadsheet calculator | Rate, hours, contingency and total with visible formulas | You paste the result into your document |
The freelance quote calculator template finds your true hourly rate from your income goal and billable hours, adds expenses and a profit buffer, and turns the rate into project quotes in Excel or Google Sheets. It is $14.99, or part of the $49 7-template bundle.
Freelance Rate & Quote Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $14.99, no subscription, instant download.
See the Freelance Rate & Quote Calculator →Buy now — $14.99All 7 templates — $49Instant access by email after checkout via Payhip.
Excel and Google Sheets formulas for a project quote
These formulas rebuild the worked example. Phase hours go in B2:B6, your hourly rate in B8, contingency % in B9 and direct costs in B10.
Labour
=SUM(B2:B6)*B8B2:B6 = phase hours, B8 = hourly rate.
Contingency
=SUM(B2:B6)*B8*B9B9 = contingency % (e.g. 15%), applied to labour only.
Quote total
=SUM(B2:B6)*B8*(1+B9)+B10B10 = direct costs passed through at cost.
Rounded-up quote
=CEILING(B11,50)B11 = quote total. Rounds up to the next $50; works in Excel and Google Sheets.
Effective rate if the job runs over
=(B11-B10)/B12B12 = hours actually worked. Compare with B8 to see what an overrun cost you.
Rounding up to a clean figure is optional; if you do it, round up, never down, so the contingency stays intact.
How much should I charge for a 500-word article?
Price the hours, not the words: estimate the time for research, drafting, editing and one revision, then multiply by your rate. If a 500-word article takes you 2 hours in total, at $86.38 that is $172.76, or about $0.35 a word.
A per-word price is just your hourly rate divided by your words per hour. If research-heavy pieces take twice as long, a flat per-word price halves your effective rate, so check it against the hours. The same logic answers "can I make $1,000 a month freelancing?": at $86.38 an hour, $1,000 of revenue is about 11.6 billable hours a month. That is revenue, not take-home: the rate only delivers your take-home goal if you bill the yearly hours it assumes. The freelance pricing spreadsheet keeps these conversions in one file. None of this is financial or tax advice; it is the arithmetic.
Step-by-step: Freelance Quote Template: How to Price and Write a Project Quote
- Work out your real hourly rate. Divide take-home goal by (1 - tax reserve), add yearly expenses, divide by billable hours. Example: $86.38.
- Break the project into phases. List each phase - discovery, design, build, revisions, launch - and estimate hours for each.
- Price the labour. Multiply total hours by your rate. 40 hours x $86.38 = $3,455.20.
- Add contingency to the labour. Add 10-20% of labour for unknowns. 15% of $3,455.20 = $518.28.
- Add direct costs at cost. Add stock assets, licences or subcontractors you pay for the project, e.g. $120, for a total of $4,093.48.
- Write the quote document. Include scope, exclusions, price, revision limit, timeline, payment terms, expiry date and how to accept.
Skip the setup: Freelance Rate & Quote Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $14.99, no subscription, instant download.
See the Freelance Rate & Quote Calculator →Buy now — $14.99All 7 templates — $49Instant access by email after checkout via Payhip.
Frequently asked questions
How do I price a freelance project?
Multiply estimated hours by your real hourly rate, add a contingency on the labour and add direct costs. A 40-hour job at $86.38 with 15% contingency and $120 of costs comes to $4,093.48.
What is the proper format for a quote?
A quote has a header with both parties and a quote number, the scope, exclusions, itemised price and total, revision limit, timeline, payment terms, an expiry date and a way to accept. One or two pages is enough.
Is there a free quotation template in Word?
Word, Google Docs and many design tools include free quote layouts, and they work well for the document itself. They do not calculate your rate or contingency, so pair one with a pricing sheet or the formulas on this page.
Can ChatGPT make a quotation?
An AI chatbot can draft quote wording and layout. It cannot know your hours, costs, tax reserve or income goal, so the numbers still need to come from your own rate calculation. Check every figure it writes before you send it.
What is the difference between a quote and a proposal?
A quote states the price and terms for a defined scope. A proposal also argues why you are the right choice: approach, relevant work, and options. A common setup is a short proposal with the quote attached as its pricing page.
Should I quote a fixed price or an hourly rate?
Quote a fixed price when you can estimate the hours well and the scope is written down; quote hourly when the brief is vague. On a fixed $4,093.48 quote, finishing in 32 hours pays $124.17 an hour, while 50 hours pays $79.47.
How much contingency should a freelance quote include?
There is no fixed rule. This page assumes 15% of labour; test 10-20% against how far your past jobs ran over, and widen it for vague briefs. At 15% on 40 hours, the buffer equals 6 extra hours at your rate. Treat the percentage as your assumption, not a standard.
I'm not a contractor, landlord or accountant. I build the pricing maths, and every number on this page shows its working so you can check it instead of trusting it. Watch the breakdowns on YouTube →