Please enter valid positive numbers for all fields.
The net amount you want in your pocket after expenses and taxes.
Software, hosting, internet, insurance, coworking space, etc.
Your combined income and self-employment tax rate.
Hours you actually charge clients (exclude admin/marketing time).
Vacation, sick days, and holidays.
Annual Overhead Costs:–
Gross Revenue Needed:–
Total Billable Hours/Year:–
Minimum Hourly Rate:–
function calculateRate() {
// Get input values
var targetSalary = parseFloat(document.getElementById('targetSalary').value);
var monthlyExpenses = parseFloat(document.getElementById('monthlyExpenses').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var billableHours = parseFloat(document.getElementById('billableHours').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var errorDisplay = document.getElementById('error-display');
var resultsArea = document.getElementById('results-area');
// Validation
if (isNaN(targetSalary) || isNaN(monthlyExpenses) || isNaN(taxRate) || isNaN(billableHours) || isNaN(weeksOff)) {
errorDisplay.style.display = 'block';
resultsArea.style.display = 'none';
return;
}
if (targetSalary < 0 || monthlyExpenses < 0 || taxRate < 0 || billableHours <= 0 || weeksOff = 1) {
taxDecimal = 0.99;
}
var netIncomeNeededPreTax = targetSalary / (1 – taxDecimal);
var grossRevenue = netIncomeNeededPreTax + annualExpenses;
// 3. Calculate Total Working Hours
var weeksInYear = 52;
var workingWeeks = weeksInYear – weeksOff;
var totalBillableHours = workingWeeks * billableHours;
// 4. Calculate Hourly Rate
var hourlyRate = 0;
if (totalBillableHours > 0) {
hourlyRate = grossRevenue / totalBillableHours;
}
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// Display Results
document.getElementById('res-overhead').innerText = formatter.format(annualExpenses);
document.getElementById('res-gross').innerText = formatter.format(grossRevenue);
document.getElementById('res-hours').innerText = Math.round(totalBillableHours);
document.getElementById('res-rate').innerText = formatter.format(hourlyRate);
resultsArea.style.display = 'block';
}
How to Calculate Your Freelance Hourly Rate
Setting the right hourly rate is one of the most critical decisions you will make as a freelancer. Unlike a salaried employee, your rate needs to cover not just your salary, but also your business expenses, taxes, health insurance, and unpaid time spent on administrative tasks. This calculator helps you work backwards from your desired take-home pay to determine exactly what you need to charge clients.
The Formula Explained
Many new freelancers make the mistake of simply dividing their desired annual salary by 2,080 (the standard number of work hours in a year). This approach often leads to financial struggle because it ignores three key factors:
Overhead: Business costs like software subscriptions, hardware, and internet.
Taxes: Self-employment taxes which are often higher than employee tax rates.
Non-Billable Hours: Time spent finding clients, invoicing, and marketing is uncompensated.
Our calculator uses the following logic to ensure you are profitable:
Minimum Rate = (Desired Net Income / (1 – Tax Rate) + Annual Expenses) ÷ Billable Hours
Understanding Billable vs. Non-Billable Hours
A standard full-time job assumes 40 hours of work per week. However, freelancers rarely bill 40 hours a week. A healthy freelance business usually operates at a 60-70% utilization rate. If you work 40 hours, likely only 25-30 of those are billable to clients. The rest is spent on business management.
When inputting your "Billable Hours per Week" above, be realistic. If you overestimate this number, you will calculate a rate that is too low to meet your income goals.
Example Calculation
Let's say you are a graphic designer aiming for a net lifestyle of $60,000 per year:
Desired Take-Home: $60,000
Monthly Expenses: $500 ($6,000/year)
Tax Rate: 25%
Billable Hours: 30 hours/week
Time Off: 4 weeks/year
Using the logic above:
Gross Income Needed for Salary: $60,000 ÷ 0.75 = $80,000
Total Revenue Needed: $80,000 + $6,000 (expenses) = $86,000