Please enter valid positive numbers for all fields.
Total Revenue Goal (Pre-Tax):–
Total Billable Hours/Year:–
Minimum Hourly Rate:
$0.00
function calculateRate() {
// 1. Get input values
var incomeInput = document.getElementById("desiredIncome").value;
var expensesInput = document.getElementById("annualExpenses").value;
var hoursInput = document.getElementById("billableHours").value;
var weeksOffInput = document.getElementById("weeksOff").value;
var taxInput = document.getElementById("taxRate").value;
// 2. Parse values to floats
var desiredIncome = parseFloat(incomeInput);
var annualExpenses = parseFloat(expensesInput);
var hoursPerWeek = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksOffInput);
var taxRate = parseFloat(taxInput);
var errorDiv = document.getElementById("errorDisplay");
var resultDiv = document.getElementById("resultBox");
// 3. Validation Logic
if (isNaN(desiredIncome) || isNaN(annualExpenses) || isNaN(hoursPerWeek) || isNaN(weeksOff) || isNaN(taxRate)) {
errorDiv.style.display = "block";
resultDiv.style.display = "none";
return;
}
if (desiredIncome < 0 || annualExpenses < 0 || hoursPerWeek <= 0 || weeksOff < 0 || taxRate < 0) {
errorDiv.style.display = "block";
resultDiv.style.display = "none";
return;
}
errorDiv.style.display = "none";
// 4. Calculation Logic
// Formula: Gross Revenue Needed = (Net Income + Expenses) / (1 – Tax Rate)
// Note: This assumes taxes are calculated on the Gross Revenue, which is a simplified view suitable for estimation.
// A stricter formula might be: (Net Income / (1 – TaxRate)) + Expenses, but usually taxes apply to profit (Revenue – Expenses).
// Let's use the standard freelancer formula:
// Profit Goal before tax = Desired Net Income / (1 – TaxRate/100)
// Total Revenue Goal = Profit Goal before tax + Annual Expenses
var taxFactor = 1 – (taxRate / 100);
// Prevent division by zero if tax rate is 100% (unlikely but possible edge case)
if (taxFactor <= 0) {
taxFactor = 0.01;
}
var preTaxIncomeNeeded = desiredIncome / taxFactor;
var grossRevenueNeeded = preTaxIncomeNeeded + annualExpenses;
var weeksWorking = 52 – weeksOff;
var totalBillableHours = weeksWorking * hoursPerWeek;
// Prevent division by zero for hours
if (totalBillableHours <= 0) {
totalBillableHours = 1;
}
var hourlyRate = grossRevenueNeeded / totalBillableHours;
// 5. Update UI
document.getElementById("grossRevenueDisplay").innerHTML = "$" + grossRevenueNeeded.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalHoursDisplay").innerHTML = totalBillableHours.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById("hourlyRateDisplay").innerHTML = "$" + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.style.display = "block";
}
Understanding Your Freelance Hourly Rate
Calculating the right hourly rate is one of the most critical steps for any freelancer, consultant, or independent contractor. Unlike a salaried employee, your rate must cover not just your take-home pay, but also your business expenses, taxes, and unpaid time off. Many new freelancers make the mistake of simply dividing their desired salary by 2,080 (the standard number of work hours in a year), failing to account for non-billable administrative tasks and vacation time.
Key Factors in the Calculation
Desired Annual Net Income: This is the amount of money you want to take home after all expenses and taxes are paid. It equates to your "salary."
Annual Business Expenses: These are the overhead costs of running your business, including software subscriptions, hardware, office rent, internet, and marketing costs.
Billable Hours: Not every hour worked is billable. You spend time on invoicing, emails, and finding clients. A realistic billable week is often 25-30 hours, not 40.
Taxes: Self-employment tax and income tax can take a significant chunk of your earnings. It is crucial to factor this into your gross revenue goal so you aren't left short at tax time.
Why Use a Calculator?
Using a Freelance Hourly Rate Calculator ensures that you are pricing your services sustainably. It helps you reverse-engineer your pricing based on your lifestyle needs rather than guessing what the market will pay. If the calculated rate is higher than market averages, it signals a need to either reduce expenses, increase billable efficiency, or target higher-value clients.
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"mainEntity": [{
"@type": "Question",
"name": "How do I calculate my freelance hourly rate?",
"acceptedAnswer": {
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"text": "To calculate your freelance hourly rate, determine your desired annual net income, add your annual business expenses, and adjust for taxes. Then, divide this total revenue goal by your total billable hours per year (weeks working multiplied by billable hours per week)."
}
}, {
"@type": "Question",
"name": "What are billable hours?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Billable hours are the hours you actually charge to a client for work performed. This excludes time spent on administrative tasks, marketing, accounting, and professional development."
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"@type": "Question",
"name": "How much should I set aside for taxes as a freelancer?",
"acceptedAnswer": {
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"text": "While it varies by location and income bracket, a common rule of thumb for freelancers is to set aside 25-30% of your gross income for taxes."
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