Chase Home Equity Loan Rates Calculator

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Freelance Hourly Rate Calculator

The take-home pay you want after taxes.
Software, insurance, hardware, office, etc.
Self-employment + income tax buffer.
Savings for business growth/rainy days.
Hours you actually charge clients for.
Vacation, sick days, and holidays.
Gross Annual Revenue Needed: $0.00
Total Billable Hours/Year: 0
Minimum Hourly Rate: $0.00
function calculateHourlyRate() { // Get input values var income = parseFloat(document.getElementById('desiredIncome').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); var taxRate = parseFloat(document.getElementById('taxRate').value); var profitMargin = parseFloat(document.getElementById('profitMargin').value); var hoursPerWeek = parseFloat(document.getElementById('billableHours').value); var weeksOff = parseFloat(document.getElementById('weeksOff').value); // Validation if (isNaN(income) || isNaN(expenses) || isNaN(taxRate) || isNaN(hoursPerWeek) || isNaN(weeksOff)) { alert("Please fill in all fields with valid numbers."); return; } if (isNaN(profitMargin)) { profitMargin = 0; } // Calculations // 1. Calculate Pre-Tax Income Needed // Formula: Net Income / (1 – Tax Rate) var taxDecimal = taxRate / 100; var preTaxIncome = income / (1 – taxDecimal); // 2. Add Business Expenses var baseRevenue = preTaxIncome + expenses; // 3. Add Profit Margin // Formula: Base Revenue / (1 – Profit Margin) var profitDecimal = profitMargin / 100; var grossRevenue = baseRevenue / (1 – profitDecimal); // 4. Calculate Total Billable Hours var workingWeeks = 52 – weeksOff; var totalBillableHours = hoursPerWeek * workingWeeks; // Handle edge case of 0 hours if (totalBillableHours <= 0) { alert("Total billable hours cannot be zero or negative. Please adjust weeks off or hours per week."); return; } // 5. Calculate Hourly Rate var hourlyRate = grossRevenue / totalBillableHours; // Display Results document.getElementById('grossRevenue').innerHTML = '$' + grossRevenue.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalHours').innerHTML = totalBillableHours.toLocaleString('en-US'); document.getElementById('hourlyRate').innerHTML = '$' + hourlyRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resultBox').style.display = 'block'; }

How to Calculate Your Freelance Hourly Rate

Determining the right hourly rate is one of the biggest challenges for new freelancers and consultants. If you price yourself too low, you risk burnout and financial instability. Price yourself too high without justification, and you may struggle to attract clients. This Freelance Hourly Rate Calculator takes into account your desired take-home pay, taxes, overhead costs, and non-billable time to generate a sustainable rate.

The Formula Behind the Calculation

Many freelancers make the mistake of simply dividing their desired annual salary by 2,080 (the standard number of working hours in a 40-hour work week). This is a recipe for disaster because it ignores the unbillable nature of running a business. The correct formula used in this calculator is:

  • Gross Revenue Goal = (Target Net Income / (1 – Tax Rate)) + Expenses + Profit Margin
  • Total Billable Hours = Billable Hours per Week × (52 – Weeks Off)
  • Minimum Hourly Rate = Gross Revenue Goal / Total Billable Hours

Key Factors Affecting Your Rate

1. Non-Billable Hours

As a freelancer, you don't get paid for the time you spend invoicing, marketing, answering emails, or learning new skills. A general rule of thumb is that only 60% to 75% of your work week is actually billable. If you plan to work 40 hours a week, you should likely only calculate your rate based on 25 to 30 billable hours.

2. Taxes and Self-Employment Costs

Unlike a traditional employee, your employer doesn't cover half of your Social Security and Medicare taxes. You are responsible for the full amount (often called Self-Employment Tax) plus federal and state income taxes. A safe estimate is to set aside 25-30% of your profit for taxes, depending on your location.

3. Overhead and Expenses

Don't forget to factor in the costs of doing business. This includes:

  • Software subscriptions (Adobe CC, Microsoft 365, Zoom)
  • Hardware upgrades (Laptops, Cameras)
  • Health insurance and liability insurance
  • Internet and phone bills
  • Co-working space fees or home office costs

Why You Should Add a Profit Margin

Your business expenses and salary cover your "break-even" point. However, a healthy business needs a profit margin (typically 10-20%). This buffer allows you to reinvest in the business, survive dry spells where client work is slow, or save for future expansion. Never aim for just "enough"—aim for sustainability.

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