Freelance Hourly Rate & Project Quote Calculator
Determine exactly what you need to charge to cover your expenses, taxes, and desired lifestyle.
How to Calculate Your Freelance Hourly Rate
Many freelancers make the mistake of simply choosing a number that "feels right" or copying a competitor. However, to run a sustainable business, you must use a mathematical approach that accounts for overhead, taxes, and non-billable time.
1. Start with Your Net Goal
This is the amount of money you want to take home after all business expenses and taxes are paid. If you want to live the same lifestyle as an employee earning $60,000, that is your starting point.
2. Account for Business Expenses
As a freelancer, you are the business. You must pay for your own laptop, software subscriptions (Adobe, Office, CRM), health insurance, and home office costs. These must be added to your target income before you calculate your rate.
3. The Tax Reality
Unlike traditional employees, freelancers are responsible for both the employer and employee portions of social security and medicare taxes (in many regions). A safe estimate is often 25-30% of your gross income.
4. Billable vs. Total Hours
You cannot bill 40 hours a week. Why? Because you need time for bookkeeping, marketing, responding to emails, and learning new skills. Most successful freelancers find that they can only realistically bill between 20 to 30 hours per week.
Example Calculation
If you want to net $70,000, have $5,000 in yearly expenses, and pay 25% in taxes, you actually need a gross income of roughly $100,000. If you work 48 weeks a year (4 weeks vacation) at 25 billable hours per week, you have 1,200 billable hours. $100,000 / 1,200 hours = $83.33 per hour.