How to Price Your Services When You're Just Starting Out

Almost every founder who sells a service instead of a product hits the same wall in her first few months: someone asks "what do you charge," and there is no honest answer ready. Not because she doesn't know her worth, but because nobody handed her a number to start from. Job postings tell you a salary. Nothing tells you a rate.

So this is the plain version: how to land on a first number that actually covers what your business costs (including the parts an employer used to cover without you noticing), which pricing model makes sense before you have a long client list to point to, and the tax detail that genuinely changes what you should be charging, which almost no generic pricing guide mentions. Athena's members are mostly in North America, so where the rules differ between the US and Canada, we've broken both out; if you're elsewhere, the pricing math is the same and the tax section will tell you what to go check locally.

The short version

Your price needs to do three jobs at once: cover your real costs (your own income plus the business expenses and tax set-aside a paycheck used to absorb for you), match what the market you're selling into will actually pay, and leave room to move as you get better and busier. Most new founders solve for only one of those (usually "what feels comfortable to say out loud") and end up underpriced for a year or two before they fix it.

The fix isn't a secret formula. It's doing the math on the floor first, picking a pricing model that fits where you are today rather than where you'll be in five years, and building in a plan to revisit the number on purpose instead of by accident.

Why the first number is always the hardest one

When you're employed, a number gets decided for you, and it already has tax withheld, a chunk of payroll tax split with your employer, and benefits folded in before you ever see it. When you set your own rate for the first time, you're not just picking "what I used to make." You're pricing something that has to cover your income, your business costs, and a tax bill that lands all at once instead of a little at a time, whether that's self-employment tax in the US or CPP contributions in Canada (more on both below). (If you're in Canada, we've written separately about just how much that first tax bill can be, and it's worth reading before you finalize a number, not after.)

That's the practical reason the first number is hard. There's also a simpler one: pricing is the first moment a lot of founders have to say a dollar figure out loud and hold it, with no boss or offer letter to hide behind. That discomfort is completely normal, and it fades with practice. It just means the first number you land on is a starting point, not a life sentence.

Start with the floor, not the ceiling

Before you think about what to charge, work out the number below which you're genuinely losing money to be in business. The Business Development Bank of Canada's guide to pricing lays out the same basic sequence for any business, product or service: know your direct costs, add in your overhead, find your break-even point, then decide your markup from there, only after that do you check it against what the market will bear. (Source: BDC: How to Set the Right Price for Your Products or Services, accessed August 2026.) For a service business, BDC is specific that the costs people miss are the invisible ones: admin time, software, professional dues, insurance, and the time you spend running the business that no client ever sees.

For a day rate or hourly number, the version of this that shows up in most freelance pricing guides works like this: add up the income you actually need plus your real business costs, divide by the hours you can honestly bill (not the hours in a work week), then build in a margin. (Source: Toggl: How to Calculate Your Billable Hourly Rate, accessed August 2026.) The part new founders miss most often is the second one: a full-time freelancer or consultant typically bills somewhere around 1,000 to 1,200 hours a year, not 2,000, once you account for admin, business development, sick days, and the work that simply isn't chargeable to anyone.

Here's what that looks like with real numbers. Say Maya, a freelance brand designer in her first year, wants to net $65,000, expects about $6,000 a year in software, insurance, and professional costs, and wants to set aside 25 to 30% of everything she earns for income tax and self-employment contributions (that's a commonly cited starting range in both the US and Canada, covered in more detail below). That's roughly $95,000 to $100,000 she needs the business to bring in before a margin for slow months. If she can honestly bill 1,100 hours in her first year, that's a floor of about $86 to $91 an hour, before she's added anything for profit or priced in what the market will actually pay. The number that matters isn't $86. It's that she now knows her floor, and can stop guessing.

Pick a pricing model that fits where you are

There's more than one way to charge, and the right one depends less on your industry and more on how much proof you have to point to yet.

Hourly. The simplest to explain and the easiest to start with, especially when scope is unclear or changes often. Its downside is a hard ceiling: your income is capped by how many hours you can bill, and clients sometimes fixate on the hour rather than the outcome.

Project or fixed-fee. You quote a flat number for defined deliverables instead of your time. It's currently the single most common way consultants charge (30% of consultants, just ahead of hourly at 29%), and it removes the awkwardness of a client watching a clock. The catch is scope creep: without a clear list of what's included, a fixed fee can quietly turn into far more hours than you priced for. (Source: Consulting Success: How to Set Your Consulting Fees, accessed August 2026.)

Value-based. You price against the outcome you create for the client rather than your time or your task list, aiming for the client to receive several times what they pay you in value. It's genuinely the most profitable model on average (51% of consultants using value-based fees land projects worth $10,000 or more, against 39% of those billing hourly), but it's also the one that depends most on being able to prove that outcome, which is exactly what a brand-new founder doesn't have much of yet. Most pricing guides are honest that this model rewards a track record more than it rewards confidence alone, so it's worth growing into rather than opening with. (Source: Consulting Success: Value-Based Pricing for Consultants, accessed August 2026.)

Retainer. A recurring monthly fee for ongoing access or work, useful once you have a client relationship steady enough to justify it. About 16% of consultants use this as their primary model. (Source: Consulting Success: How to Set Your Consulting Fees, accessed August 2026.)

For a first year in business, hourly or project-based pricing is usually the more honest starting point: it's easier to defend to a client with no case studies yet, and it gives you real data (what you actually charged, what it actually took) to move toward value-based pricing once you have outcomes worth pointing to.

The tax detail almost no pricing guide includes

This is the part that depends on where you're doing business, and it changes the actual number you put in front of a client. There are really two separate questions here: what you owe on your own income (self-employment tax), and whether you're required to add sales tax on top of your rate.

Self-employment tax, in the US and Canada. When you're employed, your employer splits certain payroll taxes with you and remits them automatically. Self-employed, you're on the hook for both halves yourself. In the US, that's a combined 15.3% self-employment tax (12.4% for Social Security, up to the annual wage base, $184,500 for 2026, plus 2.9% for Medicare, with an extra 0.9% on earnings above $200,000 as a single filer or $250,000 filing jointly), calculated on your net self-employment income. (Source: IRS: Self-Employment Tax (Social Security and Medicare Taxes); Social Security Administration: Maximum Taxable Earnings, 2026, both accessed August 2026.) In Canada, the equivalent is CPP, where a self-employed founder pays both the employee and employer portions; we've broken down the exact 2026 figures, and what a first-year tax bill actually looks like, in our guide to the surprise tax bill. Either way, the practical takeaway is the same: a real percentage of every payment (many accountants suggest 25 to 30% as a starting range, in both countries) needs to be set aside as it comes in, not figured out at tax time.

Sales tax on services, and why it varies so much more. Whether you need to add sales tax to your invoices depends heavily on where you and your client are. In the US, this is decided state by state: most states don't tax standalone professional services like consulting, coaching, writing, or design, but a meaningful number tax specific categories (digital products and certain specialized services, for instance), and post-Wayfair economic nexus rules mean you can pick up an obligation in a state you don't live in once your sales there cross that state's own threshold. There's no substitute for checking your specific state's rules once you're earning meaningfully outside your home state. (Source: Freelancers Union: Sales Tax for Freelancers, accessed August 2026.) In Canada, it's a federal rule with one clear number: once your revenue from taxable supplies (which covers almost all consulting, coaching, design, and freelance services) crosses $30,000 in a single calendar quarter, or across your most recent four quarters combined, you're required to register for GST/HST and start charging it; below that, registering is optional. Cross the threshold within one quarter and registration takes effect immediately, with 29 days to register; cross it gradually across quarters and the requirement starts at the end of the following month. (Source: Canada.ca: Small Suppliers, accessed August 2026. Canadian founders: we've also covered how this fits alongside the sole-proprietor-versus-incorporation decision in our incorporation guide.) If you're selling services from outside North America, most countries run something structurally similar under VAT or GST, each with its own registration threshold, so the same question (do I need to register yet, and at what number) is worth putting to a local accountant rather than assuming either the US or Canadian rules above apply to you.

Whichever of these applies to you, the reason it belongs in a pricing conversation and not just a tax one is timing. If your rate is quoted as a flat number with no mention of tax, and you cross a threshold partway through the year, you either absorb it out of your own margin or have an awkward conversation with an existing client about adding it on. Deciding upfront whether your rate is tax-inclusive or "plus applicable taxes" (the more common convention, and the one we'd suggest) turns crossing a threshold into an administrative step instead of a renegotiation.

A narrow, dated heads-up for BC-based founders in a few specific professions. Effective October 1, 2026, British Columbia is expanding provincial sales tax (PST) to cover accounting services (including bookkeeping and assurance), architectural services, engineering and geoscience services, non-residential real estate services (including property and strata management), and security services, at BC's standard 7% PST rate (architectural, engineering, and geoscience services are taxed on only 30% of the purchase price). This doesn't currently extend to coaching, consulting, marketing, design, or most other freelance and creative work, so it won't affect most readers, but if your work falls into one of those five categories, it's worth registering ahead of the deadline rather than after. (Source: Government of British Columbia: Notice to Providers of Professional Services, accessed August 2026. Confirm your specific obligations with a Canadian accountant, since exemptions can apply.)

Where founders tend to get it wrong early on

None of these are failures, they're just the patterns that show up most in a first year of pricing, and every one of them is fixable.

Pricing off your last salary instead of your business costs. An old salary already had tax, payroll contributions, and benefits taken out before you saw it. A rate built the same way, without adding those back in, quietly leaves you working for less than you think.

Assuming a full work week is a full billable week. Almost nobody bills 40 hours in a 40-hour week once admin, proposals, and business development are accounted for. Pricing against a fantasy number of billable hours is one of the fastest ways to end up underpaid for genuinely good work.

Matching a competitor's price without matching their situation. A rate that makes sense for an agency with salaried staff, or a freelancer three years further into their client list, isn't automatically the right rate for you. It's fine to look at what others charge; it's a mistake to copy it without adjusting for your own costs and stage.

Never coming back to the number. A rate set in your first month is a starting point, not a permanent fixture. Revisiting it every six to twelve months, or whenever your costs or your client roster changes meaningfully, is normal and expected, not something you need permission for.

Raising your rate later doesn't have to be awkward

A short note on what's ahead, since it comes up almost as soon as the first-year pricing question is settled: existing clients generally don't need to be caught off guard. Giving them thirty to sixty days' notice before a new rate takes effect, and applying the new number to new work rather than mid-project, is standard practice and rarely damages a good relationship. New clients simply get the current number. The rate you start with is not the rate you're promising to hold forever, and treating it that way from the beginning makes the first increase far less loaded when it happens.

Where a community fits into this

The genuinely useful part of pricing conversations rarely comes from a spreadsheet, it comes from another founder telling you what she actually charges and what happened when she raised it. That's a hard thing to get from a search engine, and it's a big part of why a room like Athena Collective exists: a place to ask "is this number reasonable" and hear from women who've priced the exact same kind of work, not a generic average pulled from a survey of a different industry entirely.

Trying to figure out your own number? Join Athena Collective and ask the room what similar work is actually going for right now.

FAQs

How much should I charge as a beginner consultant or freelancer?
Start by calculating your floor: the income you need plus your real business costs (including a tax and self-employment contribution set-aside) divided by the hours you can honestly bill in a year. Then check that number against what similar, established providers in your market charge, and adjust from there. There's no universal beginner rate, because costs and markets vary too much, by industry and by country, for one number to apply broadly.

Should I charge hourly or a flat project fee when I'm just starting out?
Either is a reasonable place to begin. Hourly is simplest when scope is unclear; project-based pricing (currently the most commonly used model among consultants) removes the awkwardness of being paid by the clock. Value-based pricing tends to pay the most, but it depends on a track record most new founders haven't built yet, so it's usually worth growing into rather than starting with.

Do I need to charge sales tax on my services?
It depends where you're based. In Canada, once your revenue from taxable supplies exceeds $30,000 in a single calendar quarter or across your most recent four quarters combined, you're required to register for GST/HST and start charging it; below that, it's optional. In the US, it's decided state by state, and most states don't tax standalone professional services, though a meaningful number tax specific categories, so it's worth checking your own state's rules directly. Outside North America, most countries have an equivalent VAT or GST registration threshold worth confirming locally. Whatever applies to you, decide upfront whether your quoted rate is tax-inclusive or "plus applicable taxes" so crossing a threshold doesn't force a renegotiation with existing clients.

How much should I be setting aside for self-employment tax?
In the US, self-employment tax runs 15.3% of net self-employment income (Social Security and Medicare combined, up to the annual wage base). In Canada, the equivalent is CPP, paid at both the employee and employer rate. In both countries, many accountants suggest setting aside 25 to 30% of everything you earn, covering income tax alongside these contributions, as a reasonable starting range.

Is it normal to underprice yourself in the first year?
It's extremely common, largely because there's no external number handed to you the way a salary is, and because the real costs of running a business (tax, payroll contributions, admin time, slow months) aren't visible until you've been in it for a while. It's also genuinely fixable: a rate set in month one is a starting point, not a permanent commitment.

How often should I revisit my pricing?
Most founders review pricing every six to twelve months, or whenever their costs, client roster, or experience level changes meaningfully. Giving existing clients thirty to sixty days' notice before a new rate takes effect is standard practice and keeps the relationship on good footing.

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Sources: BDC: How to Set the Right Price for Your Products or Services, Toggl: How to Calculate Your Billable Hourly Rate, Consulting Success: How to Set Your Consulting Fees, Consulting Success: Value-Based Pricing for Consultants, IRS: Self-Employment Tax (Social Security and Medicare Taxes), Social Security Administration: Maximum Taxable Earnings, 2026, Freelancers Union: Sales Tax for Freelancers, Canada.ca: Small Suppliers, Government of British Columbia: Notice to Providers of Professional Services, The Surprise Tax Bill: What Nobody Tells You in Year One, Sole Proprietor or Incorporate? A Canadian Founder's Decision Guide. All figures and dollar examples verified directly against these sources in August 2026, except the worked example in "Start with the floor, not the ceiling," which is illustrative only and not a specific founder's real numbers. Tax rules, thresholds, and rates are updated periodically, vary by country, state, or province, and can change, so confirm current numbers with a local accountant before setting your pricing. This article is general information, not tax or financial advice for your specific situation.