Freelancer Hourly Rate Calculator

Most new freelancers set their rate by guessing or copying others. This calculator works backwards from the income you actually want to take home, adding business costs, tax and the hours you can really bill.

Your numbers

Software, equipment, internet, insurance, accounting.

Your estimated total tax rate on profit.

52 minus holidays, sick days and slow weeks.

Time spent on paid client work (not admin, sales or learning).

Your results will appear here.

How this calculator works

The calculator uses three steps:

  1. Billable hours = working weeks × hours per week × billable %
  2. Gross revenue needed = (take-home income + business costs) ÷ (1 − tax %)
  3. Minimum hourly rate = gross revenue needed ÷ billable hours

The suggested day rate assumes a 5-day week (hourly rate × hours per week ÷ 5). Monthly revenue needed is the gross revenue divided by 12.

Worked example

Sara wants to take home 30,000 a year. Her business costs are 3,000, she sets aside 20% for tax, works 46 weeks of 40 hours and about 60% of that time is billable.

  • Billable hours = 46 × 40 × 0.60 = 1,104 hours
  • Gross needed = (30,000 + 3,000) ÷ 0.80 = 41,250
  • Hourly rate = 41,250 ÷ 1,104 = 37.36 per hour

So Sara should not charge less than about 37.36 an hour. Anything above that is profit or a safety margin.

Frequently asked questions

What is a good billable percentage for freelancers?

Most freelancers bill 50% to 70% of their working time. The rest goes to finding clients, invoicing, email and learning. If you are new, start with 50% to be safe.

Should I charge my minimum rate?

No. The result is the lowest rate that meets your goal. Add a margin of 10% to 30% for slow months, late payments and price increases.

Why does tax increase my rate so much?

Tax is taken from your gross income, so you have to earn more than your target. With a 25% tax rate you must earn 1.33 for every 1 you want to keep.

How many working weeks should I use?

A common choice is 46 to 48 weeks. That leaves 4 to 6 weeks for holidays, public holidays and sick days, which no client pays you for.

Is this the same as an employee salary?

No. As an employee your employer pays for equipment, holidays and often part of your tax. As a freelancer you pay all of these yourself, so your hourly rate should be much higher than an employee hourly wage.

Should I use hourly or project pricing?

Use this hourly rate as your floor even if you quote per project. Estimate the hours a project takes, multiply by your rate, then add a buffer.

Related guides

Results are estimates for general education, not financial advice. Disclaimer.