Why Freelancers Need to Pay Attention to Minimum Wage

Minimum wage is set for employees but it's very relevant to your freelance business. Here's why and how you should use it.

Miniumum wage
Freelance services should never be priced below minimum wage.

No freelancers should work for less than minimum wage. Ever.

No matter where you live. No matter what service you offer, minimum wage should your absolute floor.

If you provide a service for less than that, you’re volunteering to be exploited and you’re a drag on the freelance market.

When the government sets a minimum wage, they’re essentially saying, Look, this is the minimum amount that people need to survive (not grow, just to survive!) So we deem it inhumane and indecent to pay anyone less than $X/hr.

What sense does it make to offer your time, skills and any equipment and material needed for less than that?

What rational person runs a business to earn less than the lowest-ranking employee?

There is no reason to offer a company a freelance service for less than minimum wage.  That’s not competitive, it’s ridiculous.

You may think, well if a company is going to pay me minimum wage, they could just hire someone for the same price.

Wrong.

When a company hires a $10 an hour employee not only do they have to pay that rate on an on-going part-time or full-time basis, but they also incur a slew of other costs related to having someone on the payroll.

Always keep that in mind—salary or wages are only one of the costs of having an employee. Even if you make thesame rate as an employee, the company still saves.

Setting Minimum Wage as a Floor

Using minimum wage as a floor needs to be a location-based strategy. And it needs to depend on where the company is.

You shouldn’t sell your service to a business for any cheaper than that company can hire someone in their jurisdiction.

That means if you’re going to work for someone in Washington state, you would charge at least $12 an hour. But if the company is based in New York City, your minimum rate should be $15 an hour.

The same applies when taking work overseas in countries like the UK.

Also Read: American English vs. British English: Are You Ready for Foreign Work

Check the Math

As freelancers, a lot of our work is per project rather than per hour. In these cases, it’s especially important to pay attention to your rates.


A lot of companies get away with paying dirt-cheap rates because they get freelancers to agree to a flat fee.

Writing a white paper for $500 may sound like a decent gig. But if it takes you all week—let’s just say 40 hours—that’s only $12.50 an hour.

For a company in New York City, that’s chump change. They can’t get someone to empty the trash cans for that rate. And they know it.

So, when you’re negotiating flat-rate jobs or per-word jobs, calculate how long they are going to take.

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Using minimum wage to create a floor doesn’t mean you need to set your rates that low. That means you should never consider allowing your rates to go any lower.

If you aren’t going to demand all you’re worth, at least give yourself a rate that’s decent and fair.

See Also: What is Amazon Business