Calculate exactly what you need to charge to meet your income goals.
Your desired yearly take-home pay.
Software, hardware, insurance, tax buffer.
Hours actually spent working for clients.
Vacation, sick days, and holidays.
Total Revenue Needed:$0.00
Total Billable Hours/Year:0
Required Hourly Rate:$0.00
How to Calculate Your Freelance Hourly Rate
Determining the correct hourly rate is one of the most challenging aspects of transitioning from full-time employment to freelancing. Unlike a salaried position, your freelance rate must account for non-billable time, business overhead, taxes, and time off.
This Freelance Hourly Rate Calculator uses a "reverse engineering" approach. Instead of guessing a rate based on market averages, it calculates exactly what you need to charge to sustain your lifestyle and business costs.
The Formula Explained
To calculate your minimum hourly rate, we use the following specific formula:
Hourly Rate = (Target Income + Annual Expenses) / (Billable Hours × Working Weeks)
Key Factors in the Calculation:
Target Annual Income: This is your desired net salary. Be realistic about your living costs and savings goals.
Business Expenses: Freelancers must cover their own costs. This includes health insurance, software subscriptions, accountant fees, self-employment taxes, and equipment. A common mistake is underestimating this figure.
Billable Hours: You cannot bill 40 hours a week. You need time for marketing, invoicing, emails, and professional development. Most successful freelancers bill between 20 to 30 hours per week.
Weeks Off: You are not a robot. Calculating for 52 working weeks is a recipe for burnout. Always factor in at least 2-4 weeks for vacation, holidays, and sick leave.
Example Scenario
Let's say you want to earn $80,000 per year. You estimate your business expenses (including taxes) to be $20,000. You plan to work 30 billable hours per week and take 4 weeks off per year.
The calculation would look like this:
Total Revenue Needed: $100,000 ($80k Income + $20k Expenses)
Total Working Weeks: 48 (52 Total – 4 Off)
Total Billable Hours: 1,440 (48 Weeks × 30 Hours)
Hourly Rate: $69.44 ($100,000 / 1,440)
In this scenario, charging anything less than $70/hour means you are effectively earning less than your target salary or unable to cover your business costs.
function calculateRate() {
// 1. Get Input Values
var incomeInput = document.getElementById('targetIncome').value;
var expensesInput = document.getElementById('annualExpenses').value;
var hoursInput = document.getElementById('billableHours').value;
var weeksOffInput = document.getElementById('weeksOff').value;
// 2. Parse values and handle empty inputs
var income = incomeInput === "" ? 0 : parseFloat(incomeInput);
var expenses = expensesInput === "" ? 0 : parseFloat(expensesInput);
var hoursPerWeek = hoursInput === "" ? 0 : parseFloat(hoursInput);
var weeksOff = weeksOffInput === "" ? 0 : parseFloat(weeksOffInput);
// 3. Validation
if (hoursPerWeek = 52) {
alert("Weeks off must be less than 52.");
return;
}
// 4. Topic-Specific Logic
var totalWeeksInYear = 52;
var workingWeeks = totalWeeksInYear – weeksOff;
var totalBillableHoursYear = workingWeeks * hoursPerWeek;
var totalRevenueNeeded = income + expenses;
var hourlyRate = 0;
if (totalBillableHoursYear > 0) {
hourlyRate = totalRevenueNeeded / totalBillableHoursYear;
}
// 5. Display Results
var resultDiv = document.getElementById('calc-results');
var resTotalNeeded = document.getElementById('res-total-needed');
var resTotalHours = document.getElementById('res-total-hours');
var resHourlyRate = document.getElementById('res-hourly-rate');
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
resTotalNeeded.innerHTML = formatter.format(totalRevenueNeeded);
resTotalHours.innerHTML = totalBillableHoursYear.toLocaleString('en-US');
resHourlyRate.innerHTML = formatter.format(hourlyRate);
// Show the result container
resultDiv.style.display = "block";
}