Freelance Hourly Rate Calculator
Your Recommended Hourly Rate
How to Determine Your Freelance Hourly Rate
Setting a freelance rate is more complex than simply dividing a corporate salary by 2,080 hours. As a freelancer, you are a business owner responsible for your own overhead, insurance, equipment, and unpaid administrative time.
To calculate a sustainable rate, you must account for non-billable time. Most freelancers spend 20-30% of their week on business development, invoicing, and administrative tasks. If you plan to work 40 hours a week, you might only "bill" for 25 of them.
Calculation Example:
If you want to earn $70,000 net and have $10,000 in expenses, you need a gross revenue of $80,000.
If you take 4 weeks off, you work 48 weeks. At 20 billable hours per week, that is 960 hours per year.
Rate: $80,000 / 960 = $83.33 per hour.
If you want to earn $70,000 net and have $10,000 in expenses, you need a gross revenue of $80,000.
If you take 4 weeks off, you work 48 weeks. At 20 billable hours per week, that is 960 hours per year.
Rate: $80,000 / 960 = $83.33 per hour.
Key Factors to Consider
- Self-Employment Tax: Remember that you are responsible for both the employer and employee portions of social security and medicare.
- Value-Based Pricing: While this calculator gives you a "floor" (the minimum you need to survive), you should often charge based on the value you provide to the client rather than just your time.
- The "Bench" Time: Always include a buffer for periods when you might be between projects.