Freelance Rate Calculator
The hourly rate your income target actually requires, once unbillable time is counted.
Freelance income is not hourly pay. Between invoices there is admin, marketing, accounting and holidays that nobody pays for, and a rate that ignores them is a rate that produces a lower income than expected.
Enter the income you need, your costs, how many weeks you work and how much of the week is billable, and this calculator gives the hourly rate that actually delivers.
At a glance
- What you enter
- Income you need per year, Annual business costs, Effective tax rate, Weeks off per year, Hours worked per week, Share of the week that is billable, Hours in a billable day
- What you get
- Hourly rate you need to charge, Day rate, Revenue needed per month
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Freelance Rate Calculator
- 1 Enter Income you need per year - Before tax: what the business has to pay you.
- 2 Enter Annual business costs - Software, insurance, equipment, accounting, coworking.
- 3 Enter Effective tax rate
- 4 Enter Weeks off per year (weeks) - Holidays, public holidays and sick leave combined.
- 5 Enter Hours worked per week
- 6 Enter Share of the week that is billable - The rest goes to admin, sales, learning and email.
- 7 Enter Hours in a billable day
- 8 Press Calculate. You get Hourly rate you need to charge, Day rate, Revenue needed per month, and every intermediate step stays visible under “How is this calculated?”
- 9 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $60,000 income target with six weeks off
Full-time hours, 60% of the week billable and a 25% effective tax rate.
You enter
- Income you need per year
- $60,000.00
- Annual business costs
- $6,000.00
- Effective tax rate
- 25%
- Weeks off per year
- 6 weeks
- Hours worked per week
- 40
- Share of the week that is billable
- 60%
- Hours in a billable day
- 8
You get
- Hourly rate you need to charge
- $79.71
- Day rate
- $637.68
- Revenue needed per month
- $7,333.33
Forty-six working weeks at 60% billable give 1,104 hours to sell. Covering $66,000 of income and costs after 25% tax needs $88,000 of revenue, which is $79.71 an hour, $637.68 for an eight-hour day and $7,333 a month to invoice.
A smaller target with higher costs and fewer billable hours
A four day week, eight weeks off, half the week billable and a 30% effective rate.
You enter
- Income you need per year
- $45,000.00
- Annual business costs
- $12,000.00
- Effective tax rate
- 30%
- Weeks off per year
- 8 weeks
- Hours worked per week
- 30
- Share of the week that is billable
- 50%
- Hours in a billable day
- 6
You get
- Hourly rate you need to charge
- $123.38
- Day rate
- $740.26
- Revenue needed per month
- $6,785.71
A $45,000 income with $12,000 of costs and 30% tax needs $81,429 of revenue, and there are only 660 billable hours a year to earn it in. The rate comes out at $123.38 an hour, $740.26 for a six-hour day and about $6,786 a month, which shows how far the billable share moves the answer.
Guides that go with it
How Much Should You Charge as a Freelancer?
Most freelancers set their rate by guessing, then wonder why the month never quite adds up. By the end of this guide you will be able to build a defensible hourly rate from your real costs and income…
How Much of Your Salary Should Go to Rent?
You can work out a defensible rent ceiling in about fifteen minutes with nothing more than your payslip and a calculator. By the end of this guide you will know your gross and take-home pay, the rent…
How Much Does It Cost to Drive 100 Miles?
A hundred miles is a nice round trip to price out: one weekend outing, one leg of a longer journey, one week of commuting. By the end of this guide you will be able to work out your own cost for that…
Frequently asked questions
Why is this rate so much higher than a salaried hourly wage?
A salary pays you for every working hour, including meetings, email and training. A freelance rate can only be charged for hours a client agrees to pay for, so the same income has to be earned in fewer hours, and the business costs and the tax bill come out of that revenue before you are paid anything.
At $60,000 of income, $6,000 of costs and 25% tax you need $88,000 of revenue, which over 1,104 billable hours is $79.71 an hour. A $60,000 salary spread across 2,080 working hours is about $29 an hour, so the two numbers are not measuring the same thing even before costs and tax are counted.
What happens if I overestimate the billable share?
The billable share is the part of your working week that a client actually pays for. Quoting, invoicing, chasing payment, learning, marketing and admin are all unpaid. If you enter 80% when the real figure is 60%, the calculator spreads the revenue over a third more billable hours than you will ever have, and the rate it gives you is too low to reach your income target.
Track a normal month instead: add up the hours you invoiced and divide by the hours you worked. Most freelancers find the answer is lower than they guessed, often between 50% and 70% once holidays and quiet weeks are included. Re-run the calculator with that number.
Why are weeks off subtracted from the year?
Working weeks are 52 minus the weeks you do not work, and weeks off covers holidays, public holidays and sick leave together. When you are employed those weeks are paid. When you are freelance they are hours you cannot invoice, so the same annual revenue has to be earned in fewer working weeks.
Six weeks off leaves 46 working weeks. Cutting that to four weeks adds two weeks of working time to sell and lowers the rate you need. Understate the time off and you build a rate that only works if you never take a break or fall ill.
What does the hourly rate leave out?
It leaves out anything a client pays for directly, such as travel to their site, materials or subcontractors, and it leaves out sales tax or VAT, which you add on top of the rate if you are registered. It also assumes you can sell every billable hour at the rate it produces.
It does not cover pension contributions, income protection insurance or one-off equipment purchases beyond the annual costs you entered, and it treats the weeks you are available as weeks you are working. If you want to compare the result with employed pay, run the same gross salary figure through the salary calculator to see the take-home side.
Terms used here
Short, plain-language definitions of the words this calculator uses.