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Freelance Rate Calculator

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Find the hourly rate you actually need to charge to hit your target income - accounting for business expenses and the reality that not every hour is billable.

Freelance Rate Calculator

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Hourly rate to charge
$79.17
Total billable hours/year
1,200
Day rate (8hr)
$633.33
Billable hours are typically well under 40/week once admin, marketing, and unpaid work are accounted for.

The formula

Hourly rate = (Desired income + Annual expenses) / (Billable hours per week x Working weeks per year)
Example

Targeting $80,000 take-home income with $15,000 in expenses, billing 25 hours/week across 48 working weeks: rate = (80,000+15,000) / (25x48) = 95,000/1,200 ≈ $79.17/hour.

Step-by-step guide

  1. Enter your desired take-home income for the year - what you actually want to earn, before taxes.
  2. Enter your annual business expenses - software, equipment, insurance, marketing, and any other costs of running your freelance business.
  3. Enter your realistic billable hours per week - not total working hours, since admin, marketing, and unpaid pitching all eat into the total.
  4. Enter your working weeks per year, accounting for vacation, sick time, and slow periods.

The billable hours trap

New freelancers very commonly overestimate billable hours by assuming something close to a full 40-hour week converts directly to paid work - in reality, client communication, invoicing, marketing, proposals, and admin routinely consume a third or more of total working time. Basing your rate on 40 billable hours when you're realistically billing 20-25 means significantly underpricing your actual services, a mistake that compounds across an entire year.

Common mistakes

Using a full 40-hour work week as billable hours - unpaid admin, sales, and marketing time reduce realistic billable hours well below total hours worked.
Forgetting self-employment tax and benefits costs that an employer would normally cover - health insurance, retirement contributions, and the employer-side portion of payroll taxes all fall on a freelancer directly.

Frequently asked questions

How many billable hours per week is realistic?

Many experienced freelancers report somewhere between 20-30 truly billable hours in a typical 40-hour work week, though this varies a lot by field and how much of the business (sales, admin) you handle yourself versus outsourcing.

Should self-employment tax be included in "expenses"?

This calculator's "desired income" field is meant as take-home, pre-tax business income - self-employment and income taxes then come out of that, similar to how an employee's gross pay differs from net pay. Some freelancers prefer to build an explicit tax buffer into their target income figure directly.

Can I charge different rates for different types of clients or projects?

Absolutely - this calculator gives a baseline minimum rate. Many freelancers charge more for rush work, specialized expertise, or high-value clients, and may charge less for simpler recurring work or when building a long-term relationship.

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