The net salary you want to take home before taxes.
Software, insurance, equipment, coworking space, etc.
Hours actually charged to clients (exclude admin/marketing time).
Vacation, sick days, and holidays.
Percentage to set aside for taxes.
Total Revenue Needed:–
Total Billable Hours/Year:–
Minimum Hourly Rate:–
Understanding Your Freelance Hourly Rate
Calculating the correct hourly rate is one of the most critical steps for freelancers, consultants, and independent contractors. Unlike a salaried employee, your rate must cover not just your desired take-home pay, but also your business overhead, taxes, and unbillable time.
This Freelance Hourly Rate Calculator uses a "bottom-up" approach. Instead of guessing a market rate, it starts with your financial goals and works backward to determine what you need to charge to sustain your lifestyle and business health.
Key Factors in the Calculation
Desired Income: This is your base salary replacement. It's the money used for personal rent/mortgage, groceries, and savings.
Business Expenses (Overhead): Freelancers often underestimate costs. This includes health insurance, liability insurance, software subscriptions (Adobe, Office, CRM), hardware upgrades, and marketing costs.
Billable Hours vs. Working Hours: You might work 40 hours a week, but you likely only bill for 25-30. The rest is spent on invoicing, emailing, and finding new clients. If you calculate your rate based on 40 hours, you will undercharge.
Taxes: As a freelancer, you are responsible for the full tax burden (including self-employment tax in many jurisdictions). Our calculator adjusts your revenue target to ensure your net income goal is met after setting aside the tax percentage you provide.
Example Scenario
Let's say you want to earn a net salary of $60,000. You estimate $10,000 in business expenses and need to set aside 25% for taxes. You plan to work 30 billable hours a week and take 4 weeks off.
To hit these numbers, you cannot simply divide $60,000 by your hours. You actually need to generate enough revenue to pay the taxes and expenses first. This calculator performs the necessary gross-up calculation to give you the precise hourly figure needed to meet your $60,000 net goal.
function calculateRate() {
// 1. Get input values using var
var incomeInput = document.getElementById('annualIncome').value;
var expensesInput = document.getElementById('annualExpenses').value;
var hoursInput = document.getElementById('billableHours').value;
var weeksOffInput = document.getElementById('weeksOff').value;
var taxInput = document.getElementById('taxBuffer').value;
// 2. Validate inputs
if (incomeInput === "" || hoursInput === "") {
alert("Please fill in at least the Desired Income and Billable Hours fields.");
return;
}
var desiredNet = parseFloat(incomeInput);
var expenses = parseFloat(expensesInput) || 0;
var weeklyHours = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksOffInput) || 0;
var taxRate = parseFloat(taxInput) || 0;
// 3. Logic
// Calculate total working weeks
var workingWeeks = 52 – weeksOff;
// Calculate total billable hours per year
var totalBillableHours = workingWeeks * weeklyHours;
// Avoid division by zero
if (totalBillableHours 0) {
revenueNeeded = (desiredNet / taxFactor) + expenses;
} else {
// Edge case if tax is 100% or close (unrealistic but handles math errors)
revenueNeeded = desiredNet + expenses;
}
var hourlyRate = revenueNeeded / totalBillableHours;
// 4. Format and Display Results
document.getElementById('totalRevenueResult').innerText = "$" + revenueNeeded.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalHoursResult').innerText = totalBillableHours.toFixed(0);
document.getElementById('hourlyRateResult').innerText = "$" + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result box
document.getElementById('calc-results').style.display = 'block';
}