Freelance rate calculator: find the hourly rate you need to hit your income goal. Enter target salary, billable hours, work weeks, and yearly expenses.
Results are estimates for planning purposes and are not financial, medical, or professional advice.
How to Use the Freelance Hourly Rate Calculator
Freelancers often undercharge because they forget about non-billable time, time off, and business expenses. This calculator works backward from your income goal to the hourly rate that actually funds it.
- Enter the annual take-home income you want, like the salary you would accept as an employee.
- Enter realistic billable hours per week, not total hours worked, since admin and marketing are unpaid.
- Enter billable weeks per year, leaving room for vacation and slow periods.
- Add yearly business expenses and review the hourly rate you must charge.
Freelance Rate Formula
Hourly Rate = (Desired Income + Annual Expenses) / (Billable Hours per Week x Billable Weeks per Year). For a 100,000 dollar income goal with 15,000 dollars of expenses, 30 billable hours per week, and 48 working weeks: (100,000 + 15,000) / (30 x 48) = 115,000 / 1,440 = 79.86 dollars per hour. Notice this is far above 100,000 divided by 2,080, which would be only 48.08 dollars, because freelancers bill fewer hours and pay their own costs.
Example
Dev wants to take home 100,000 dollars freelancing. He can realistically bill 30 hours per week for 48 weeks (1,440 hours) and spends 15,000 dollars yearly on software, insurance, and accounting. He needs to charge about 79.86 dollars per hour. Charging only 50 dollars per hour At 50 dollars per hour he earns 72,000 dollars from 1,440 billable hours, and after 15,000 dollars in expenses he keeps 57,000 dollars, leaving him 43,000 dollars short of his goal.
Common Rate-Setting Mistakes
Three assumptions wreck rates. The 2,080-hour trap treats every work hour as billable, but 30 billable hours a week is a realistic ceiling. Copying a competitor’s rate ignores that your expenses, taxes, and goals differ from theirs. And planning 52 fully booked weeks forgets vacations, sick days, and slow months; 46 to 48 weeks is the honest range. Recalculate yearly as any of these change.
Frequently Asked Questions
Why is my freelance rate higher than my old salary rate?
Employees get paid for 2,080 hours and receive benefits. Freelancers bill fewer hours, fund their own benefits, pay self-employment tax, and cover business costs, so the rate must be 1.5 to 2 times the equivalent salary rate.
What counts as billable hours?
Only hours a client pays for. Prospecting, invoicing, learning, and admin typically consume 10 to 20 hours weekly on top of billable time, so be honest about the split.
Should I charge by project instead?
Value-based project pricing often earns more, but still compute your floor hourly rate first so no project pays below it. Divide the project fee by estimated hours to check.
How do expenses change the rate?
Every dollar of yearly expense must be earned through billable hours. At 1,440 billable hours, each 1,440 dollars of expenses adds exactly one dollar to the required hourly rate.
Do I need to add taxes?
This calculator targets take-home income. In reality, set aside 25 to 30 percent for income and self-employment taxes, or raise your target income figure to a pre-tax number.
How do I convert my hourly rate to a day rate?
Multiply by the hours in your workday. At 79.86 dollars per hour, an eight-hour day comes to about 638.89 dollars. Use the same method for project quotes: day rate times the days the work needs.
Related Calculators
Compare offers with the Salary Raise Calculator and plan time off with the Business Days Calculator and convert your rate back to a salary with the Hourly to Salary Calculator.