Freelance Hourly Rate Calculator
Determine exactly what you need to charge to meet your income goals.
Your Minimum Hourly Rate:
Why Most Freelancers Undercharge
One of the most common mistakes new freelancers make is attempting to replicate their salaried hourly wage. If you made $50/hour at your day job, charging $50/hour as a freelancer will actually result in a massive pay cut.
Why? Because as an employee, your employer covers overhead, taxes, health insurance, and pays for your downtime. As a freelancer, you are the business. You must account for unbillable time (admin, marketing, sales) and business expenses.
How This Calculator Works
To determine a sustainable hourly rate, this tool uses the following logic:
- Total Revenue Needed: It sums your Target Net Income and your Annual Overhead (software, insurance, self-employment taxes).
- Total Billable Hours: It calculates the actual time you have available to earn money by subtracting your Weeks Off from the year (52 weeks) and multiplying by your Billable Hours per Week.
- The Formula: (Target Income + Overhead) รท Total Billable Hours = Minimum Hourly Rate.
Understanding Your Inputs
Annual Overhead & Taxes: Don't forget to include the self-employment tax (approx. 15.3% in the US), health insurance premiums, software subscriptions (Adobe, Office, project management tools), and hardware costs.
Billable Hours: Be realistic. If you work 40 hours a week, you likely only spend 20 to 30 of those hours actually doing work you can charge a client for.
Weeks Off: Freelancers don't get paid vacation. If you want to take 2 weeks of holiday and account for 5 sick days, enter roughly 3 or 4 weeks here to ensure your working hours cover that time off.