Freelance Hourly Rate Calculator
Determine exactly what you need to charge to meet your income goals while covering taxes and expenses.
How to Calculate Your True Freelance Rate
One of the biggest mistakes new freelancers make is undercharging. Unlike a traditional salary, your freelance rate must cover not just your take-home pay, but also your taxes, health insurance, software subscriptions, retirement contributions, and unpaid time off.
The Formula Behind the Calculation
This calculator uses a reverse-engineering approach to determine your rate. It starts with how much money you want to keep in your pocket (Net Income) and adds your expenses and tax obligations to find the Gross Revenue required. Finally, it divides that total by your actual billable hours.
- Step 1: Calculate Total Expenses: We multiply your monthly overhead by 12 to get annual business costs.
- Step 2: Account for Taxes: We adjust your desired net income to ensure you have enough left over after the government takes its share.
- Step 3: Determine Billable Capacity: We subtract your weeks off from the 52-week year, then multiply by your realistic weekly billable hours.
Billable vs. Non-Billable Hours
A critical variable in this calculator is "Billable Hours per Week." It is rare to bill 40 hours a week as a freelancer. You spend time on marketing, invoicing, emails, and professional development—none of which is paid directly by a client. A healthy average for many freelancers is 20-25 billable hours per week.
Why You Should Charge More Than You Think
If you divide your desired salary by 2,080 (a standard 40-hour work year), you will drastically underprice yourself. You need to charge a premium to cover the instability of freelance work and the lack of employer-provided benefits. Use the "Weeks Off" input to ensure you can afford to take vacations and sick days without financial stress.