Price from client value, not hours. The Value-Based Pricing Calculator takes value delivered to the client per year, share of the value you charge, your cost to deliver and returns value-based price plus your margin, client's return on the fee. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
For freelancers and agencies the scarce resource is billable time. Pricing has to cover unpaid hours, tools, taxes and time off, not just the hours a client sees on an invoice. Use the worked example below to check the maths against your own figures.
How the Value-Based Pricing Calculator works
Pricing on value means charging a fraction of what the work is worth to the client rather than the hours it takes. A 10–20% share still leaves the client a 5–10x return, which is why it is easy to justify.
Worked example
With the example values (value delivered to the client per year of $100,000, share of the value you charge of 15%, your cost to deliver of $8,000), the value-based price is $15,000.00; your margin 46.67%, client's return on the fee 6.67x. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is value-based price calculated?
price = value delivered × share captured; client ROI = value ÷ price.
Which figures do I need?
Value delivered to the client per year, share of the value you charge, your cost to deliver. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How do I choose the target income or margin?
Start from what you need to earn after tax and expenses, add a margin for unpaid time (sales, admin, holidays, slow months) and check the resulting rate against what your market pays.
