Hours actually charged to clients (exclude admin time).
Vacation, sick days, and holidays.
Include income tax and self-employment tax.
Buffer for business growth/savings.
Minimum Hourly Rate Needed:
$0.00
Gross Annual Revenue Goal:$0
Total Billable Hours/Year: 0
Total Annual Expenses: $0
Estimated Tax Liability: $0
function calculateFreelanceRate() {
// 1. Get input values
var salaryInput = document.getElementById("desiredSalary").value;
var overheadInput = document.getElementById("monthlyOverhead").value;
var hoursInput = document.getElementById("billableHours").value;
var weeksOffInput = document.getElementById("weeksOff").value;
var taxRateInput = document.getElementById("taxRate").value;
var profitMarginInput = document.getElementById("profitMargin").value;
// 2. Validate inputs
var desiredSalary = parseFloat(salaryInput);
var monthlyOverhead = parseFloat(overheadInput) || 0;
var billableHours = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksOffInput) || 0;
var taxRate = parseFloat(taxRateInput) || 0;
var profitMargin = parseFloat(profitMarginInput) || 0;
if (isNaN(desiredSalary) || isNaN(billableHours) || billableHours <= 0) {
alert("Please enter valid numbers for Salary and Billable Hours.");
return;
}
// 3. Perform Calculations
// A. Calculate Annual Overhead
var annualOverhead = monthlyOverhead * 12;
// B. Calculate Base Need (Salary + Overhead)
var baseNeed = desiredSalary + annualOverhead;
// C. Factor in Tax
// Formula: Gross = Net / (1 – TaxRate)
// We want the Net to cover BaseNeed.
// Note: This calculates Gross Revenue required to have 'BaseNeed' left after taxes.
var taxDecimal = taxRate / 100;
var grossNeededForTax = baseNeed / (1 – taxDecimal);
// D. Factor in Profit Margin
// Profit is calculated on top of the Gross Revenue required for operations/salary
var profitDecimal = profitMargin / 100;
var finalGrossRevenue = grossNeededForTax * (1 + profitDecimal);
// Calculate specific amounts for display
var totalTaxAmount = finalGrossRevenue * taxDecimal;
// E. Calculate Total Available Hours
var workingWeeks = 52 – weeksOff;
var totalBillableHours = workingWeeks * billableHours;
if (totalBillableHours <= 0) {
alert("Total billable hours cannot be zero or negative. Please adjust weeks off or weekly hours.");
return;
}
// F. Calculate Hourly Rate
var hourlyRate = finalGrossRevenue / totalBillableHours;
// 4. Update DOM
document.getElementById("resultBox").style.display = "block";
document.getElementById("finalRate").innerHTML = "$" + hourlyRate.toFixed(2) + " / hour";
// Helper function for currency formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById("grossRevenue").innerText = formatter.format(finalGrossRevenue);
document.getElementById("totalHours").innerText = totalBillableHours.toFixed(0);
document.getElementById("totalExpenses").innerText = formatter.format(annualOverhead);
document.getElementById("totalTax").innerText = formatter.format(totalTaxAmount);
}
Why You Need a Specialized Freelance Rate Calculator
Determining your hourly rate as a freelancer or consultant is one of the most challenging aspects of self-employment. Unlike a traditional salary where taxes and overhead are handled by the employer, a freelancer must price these costs into their hourly fee. Simply dividing your desired annual salary by 2,080 (standard 40-hour work weeks) will result in a rate that is far too low, potentially leading to financial strain.
This Freelance Hourly Rate Calculator uses the "bottom-up" approach. Instead of guessing a market rate, it calculates exactly what you need to charge to cover your personal income goals, business expenses, taxes, and non-billable time.
Key Factors in Calculating Your Rate
1. Billable vs. Non-Billable Hours
A common mistake is assuming you can bill 40 hours a week. In reality, successful freelancers often spend 25% to 50% of their time on non-billable tasks such as:
Marketing and business development
Invoicing and accounting
Client communication and emails
Skill development and training
If you need to earn a full-time income, you must earn it in fewer hours. Our calculator adjusts for this by asking for your billable hours specifically.
2. The Self-Employment Tax Wedge
When you are employed, your employer pays half of your FICA taxes. When you are self-employed, you pay the full amount (often around 15.3% in the US) plus income tax. This calculator includes a tax buffer calculation to ensure your net "take-home" pay meets your desired salary.
3. Overhead and Profit Margin
Your rate needs to cover software subscriptions, hardware upgrades, health insurance, and office space. Additionally, adding a profit margin is crucial. Profit is not salary; it is capital retained by the business to fund future growth or survive lean months. A healthy freelance business aims for at least a 10-20% profit margin on top of the owner's salary.
How to Interpret Your Results
If the calculated rate is higher than what you believe the market will bear, you have three levers to adjust:
Increase Billable Hours: Reduce admin time to spend more time earning.
Reduce Overhead: Cut unnecessary subscriptions or expenses.
Adjust Salary Expectations: Be realistic about your starting income if you are new to the field.
Conversely, if the rate is lower than market averages, you have the opportunity to increase your profit margin or work fewer hours while maintaining your lifestyle.