Freelance Hourly Rate Calculator
Determine exactly what you need to charge to meet your financial goals and cover business expenses.
Your Calculated Freelance Rate:
How to Calculate Your Freelance Hourly Rate
Setting your freelance rate is one of the most critical steps in building a sustainable business. Many new freelancers make the mistake of simply matching a previous salary or looking at what competitors charge. However, being a freelancer means you are the employer and the employee. You must cover your own taxes, benefits, equipment, and non-billable time.
1. The "Take-Home" Goal
Start with your net income—the amount you want in your bank account at the end of the year to cover your personal life (rent, food, savings). If you need $60,000 to live comfortably, that is your starting point, not your final revenue goal.
2. Factoring in Business Overhead
Unlike a traditional job, your office space, laptop, high-speed internet, and SaaS subscriptions are out-of-pocket costs. If you spend $500 a month on these, you need to generate an extra $6,000 per year just to break even on expenses.
3. The Reality of Billable vs. Non-Billable Hours
A standard work week is 40 hours, but a freelancer rarely bills 40 hours. You must spend time on marketing, invoicing, client meetings, and administrative tasks. Most successful freelancers find that 20 to 25 hours of billable work per week is a realistic peak. If you calculate your rate based on 40 hours but only work 20 for clients, you will earn half of your target income.
The Math Behind the Calculator
To find your rate, we use the following formula:
- Total Annual Expenses: (Monthly Expenses × 12)
- Gross Income Required: (Net Income / (1 – Tax Rate)) + Total Annual Expenses
- Total Billable Hours: (52 weeks – Vacation Weeks) × Weekly Billable Hours
- Hourly Rate: Gross Income Required / Total Billable Hours
Real World Example
Imagine you want $50,000 take-home pay. Your tax rate is 20%, and your expenses are $200/month. You want 4 weeks of vacation and plan to bill 20 hours per week.
- Gross needed for $50k net: $62,500
- Expenses: $2,400
- Total Revenue Needed: $64,900
- Total Hours: 48 weeks × 20 hours = 960 hours
- Required Rate: $67.60 per hour