Determine exactly what you need to charge to meet your income goals.
Take-home pay goal before taxes
Software, hosting, internet, etc.
Vacation, sick days, and holidays
Hours actually spent working for clients
Self-employment and income tax buffer
Extra buffer for business savings
Total Annual Revenue Needed:$0.00
Total Billable Hours/Year:0
Minimum Hourly Rate:$0.00
Daily Rate (approx):$0.00
function calculateRate() {
// 1. Get input values
var desiredNet = parseFloat(document.getElementById('desiredIncome').value);
var monthlyExp = parseFloat(document.getElementById('monthlyExpenses').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var billableHoursPerWeek = parseFloat(document.getElementById('billableHours').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
// 2. Validate inputs
if (isNaN(desiredNet) || isNaN(monthlyExp) || isNaN(weeksOff) || isNaN(billableHoursPerWeek) || isNaN(taxRate)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
if (isNaN(profitMargin)) {
profitMargin = 0;
}
// 3. Logic Calculation
// Annual Business Expenses
var annualExpenses = monthlyExp * 12;
// Total Net Needed (Income + Expenses)
var totalNetNeeded = desiredNet + annualExpenses;
// Adjust for Tax
// Formula: Gross = Net / (1 – TaxRateDecimal)
var taxDecimal = taxRate / 100;
if (taxDecimal >= 1) {
alert("Tax rate cannot be 100% or more.");
return;
}
var grossRevenueNeeded = totalNetNeeded / (1 – taxDecimal);
// Adjust for Profit Margin
// Add percentage on top of the gross revenue
var profitDecimal = profitMargin / 100;
var totalRevenueTarget = grossRevenueNeeded * (1 + profitDecimal);
// Calculate Billable Hours
var workingWeeks = 52 – weeksOff;
var totalBillableHours = workingWeeks * billableHoursPerWeek;
if (totalBillableHours <= 0) {
alert("Total billable hours must be greater than zero.");
return;
}
// Calculate Rate
var hourlyRate = totalRevenueTarget / totalBillableHours;
var dailyRate = hourlyRate * (billableHoursPerWeek / 5); // Assuming 5 day work week for daily calc estimation, or usually 8 hours, but let's base it on billable load
// Alternative Daily Rate: Rate * (Billable Hours / 5 days) usually works, but daily rate usually implies a "Day Rate" for full availability.
// Let's stick to strict math: Hourly Rate * 8 (Standard day) or Hourly Rate * (BillableHours / 5)?
// Let's use standard 8 hours for a "Day Rate" quote, or clarify it's based on the billable load.
// Better: Hourly Rate * (BillableHoursPerWeek / 5) gives the daily earning requirement.
var dailyEarningReq = totalRevenueTarget / (workingWeeks * 5);
// 4. Update DOM
document.getElementById('totalRevenueDisplay').innerHTML = "$" + totalRevenueTarget.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalHoursDisplay').innerHTML = totalBillableHours.toLocaleString('en-US', {maximumFractionDigits: 0});
document.getElementById('hourlyRateDisplay').innerHTML = "$" + hourlyRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('dailyRateDisplay').innerHTML = "$" + dailyEarningReq.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultContainer').style.display = "block";
}
How to Calculate Your Freelance Hourly Rate
Determining the right hourly rate is one of the biggest challenges for freelancers, consultants, and independent contractors. Unlike a salaried employee, your rate must cover not just your salary, but also your taxes, overhead costs, and unpaid time off. This Freelance Hourly Rate Calculator helps you reverse-engineer your rate based on your lifestyle and financial goals.
Why You Can't Just Divide Your Old Salary by 2,080
A common mistake new freelancers make is taking their previous annual salary and dividing it by 2,080 (the standard number of work hours in a year: 40 hours x 52 weeks). This approach is flawed for several reasons:
Unbillable Time: You will not bill 40 hours a week. You need time for marketing, accounting, and admin work. Most successful freelancers only bill 20-30 hours per week.
Taxes: As a freelancer, you are responsible for both the employer and employee portions of social security and medicare taxes (self-employment tax), plus income tax.
Benefits: You no longer have paid vacation, sick leave, health insurance, or 401k matching. Your rate must include a premium to cover these costs yourself.
Overhead: You must pay for your own laptop, software subscriptions, internet, and office space.
Key Factors in the Calculation
To use this calculator effectively, you need to understand the four main inputs:
1. Desired Annual Net Income
This is the amount of money you want to put in your pocket after expenses and taxes. Think of this as your "take-home" salary. Be realistic about your living costs and savings goals.
2. Billable Hours vs. Worked Hours
Your "Billable Hours Per Week" is the time you actually charge clients for. If you work 40 hours a week, you might only spend 25 hours on client projects. The remaining 15 hours are spent finding new clients, sending invoices, and managing your business. Inputting 40 billable hours is usually unrealistic unless you have a long-term full-time contract.
3. The "Weeks Off" Factor
Freelancers often forget to account for time off. If you don't work, you don't get paid. You should account for at least 2 weeks of vacation, 1 week of sick time, and 1 week for public holidays. That means you are likely only working 48 weeks a year, not 52.
Interpreting Your Results
Once the calculator generates your Minimum Hourly Rate, compare it to the market rates for your industry. If the calculated rate is significantly higher than the market average, you may need to:
Reduce your overhead expenses.
Increase your billable hours by improving productivity.
Specialize your skills to justify a premium rate.
If the calculated rate is lower than the market average, congratulations! You have room to raise your prices and increase your profit margin significantly.