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Freelance Hourly Rate Calculator
Find the hourly rate you should charge. Enter your income goal, taxes, business expenses and billable hours to see a rate that covers your costs and keeps you profitable.
Enter your income goal and costs, then press Calculate to see the hourly rate to charge.
What Is a Freelance Hourly Rate Calculator?
A freelance hourly rate calculator shows you the minimum hourly rate you should charge to reach your income goal. Many new freelancers pick a rate by looking at what employees earn per hour, but that number leaves out a lot. As a freelancer you pay your own taxes, buy your own equipment and software, and pay for your own time off. You also cannot bill every hour you work, because part of your week goes to finding clients, sending invoices and answering emails.
This calculator puts all of these costs together. It starts with the income you want, adds taxes, business expenses and a profit buffer, and divides the total by the hours you can really bill. The result is a rate that keeps your business healthy instead of just matching a salary.
How to Use This Freelance Rate Calculator
- Pick a mode. Use Income goal if you know how much you want to take home each year. Use Employee salary if you want to match or beat a salary.
- Enter your income and tax rate. In the salary mode, enter the yearly salary and the value of the benefits you would lose, such as paid leave, health cover and retirement contributions.
- Add business expenses. Include software, equipment, insurance, accounting, internet and workspace costs for a full year.
- Set your billable hours. Enter the hours per week you can realistically bill, and the weeks you plan to take off.
- Add a profit buffer and press Calculate. The results show your hourly rate, day rate and the full cost breakdown.
How Your Freelance Hourly Rate Is Calculated
The calculator follows these steps:
- Take-home income ÷ (1 − tax rate) = income before tax.
- Income before tax + business expenses = base revenue.
- Base revenue × (1 + profit buffer) = total revenue needed.
- Billable hours per week × (52 − weeks off) = billable hours per year.
- Total revenue needed ÷ billable hours per year = hourly rate.
In the employee salary mode, step 1 is replaced by salary + the value of benefits. A salary does not include the benefits you get from an employer, so a freelancer needs to charge more than the salary hourly figure to end up in the same place.
Example: you want to take home 60,000 a year, you expect to pay 20% tax, and your business costs 6,000 a year. Income before tax is 60,000 ÷ 0.8 = 75,000. Adding expenses gives 81,000, and a 10% buffer brings it to 89,100. If you bill 25 hours a week for 46 weeks (6 weeks off), that is 1,150 billable hours. Your rate is 89,100 ÷ 1,150 = 77.48 per hour.
Salary example: to match a 50,000 salary with 20% benefits and 5,000 of expenses, you need 65,000 plus a 10% buffer, which is 71,500. Over 1,150 billable hours that is 62.17 per hour.
Hourly Rate by Billable Hours
Billable hours have a big effect on your rate. The table uses the first example above (89,100 of revenue needed, 46 working weeks).
| Billable hours per week | Billable hours per year | Hourly rate |
|---|---|---|
| 15 | 690 | 129.13 |
| 20 | 920 | 96.85 |
| 25 | 1,150 | 77.48 |
| 30 | 1,380 | 64.57 |
| 35 | 1,610 | 55.34 |
Billable Hours vs Working Hours
A full time employee works about 2,080 hours a year (40 hours for 52 weeks). A freelancer is different. Many freelancers bill only about half to two thirds of the hours they work, because the rest goes to marketing, proposals, admin, learning and unpaid gaps between projects. If you work 40 hours a week, a billable figure of 20 to 28 hours is a realistic starting point.
If you enter too many billable hours, your hourly rate looks lower than it should be, and you will fall short of your income goal. It is safer to start with a lower number of billable hours and raise it later.
Expenses to Include
- Software, apps and subscriptions
- Computer, phone and other equipment
- Business insurance and professional fees
- Accounting, legal and bank fees
- Internet, phone and workspace or coworking costs
- Marketing, website and domain costs
- Training, courses and conferences
- Retirement savings and health cover you pay yourself
Tips for Setting Your Rate
- Treat the result as your minimum. Charge more when the work is urgent, specialised or high value to the client.
- Quote projects, not only hours. A fixed project price based on your hourly rate rewards you for working fast and delivers a clear cost to the client.
- Review your rate every year. Update it when your costs, skills or demand change.
- Track your time. Real data on hours per project shows if your estimates and rate are working.
- Keep a profit buffer. Slow months and late payments happen to every freelancer.
Frequently Asked Questions
How do I calculate my freelance hourly rate?
Take the income you want to earn, add taxes and business expenses, and divide the total by the number of hours you can bill in a year. This calculator does each step and also adds a profit buffer for slow periods.
Why is a freelancer's hourly rate higher than an employee's?
A freelancer pays for taxes, benefits, equipment, insurance and time off, and cannot bill every hour worked. The higher rate covers these costs, which an employer usually covers for an employee.
How many billable hours per week should I use?
Most freelancers bill between 20 and 30 hours a week, even when they work longer. Time spent on admin, marketing and finding clients is not billable. Start with a lower number if you are not sure.
How much extra should I charge to match a salary?
A common rule is to add the value of benefits, which is often 20 to 30 percent of the salary, plus your business expenses. Use the Employee salary mode and set the benefits value to match your situation.
What tax rate should I enter?
Enter the share of your income that goes to income tax and similar contributions. It depends on your country and income level. An accountant can give you an accurate figure.
Should I charge hourly or by project?
Both work. Use your hourly rate to estimate the hours a project will take, then quote a fixed price. Hourly billing suits open ended work, and project pricing suits work with a clear scope.
Is my data saved anywhere?
No. All calculations run in your browser. Nothing you enter is sent to a server or stored.