Freelance Hourly Rate Calculator
Determine exactly what you should charge per hour to meet your income goals and cover business expenses.
How to Calculate Your Freelance Hourly Rate
Setting your freelance rate is one of the most stressful parts of going solo. Many freelancers make the mistake of simply looking at what their peers charge, or worse, converting their old employee salary directly into an hourly rate. This often leads to under-earning because it fails to account for self-employment taxes, overhead, and non-billable time.
The Freelance Rate Formula
To find your "Break-Even" rate, we use the following logic:
Step 1: Determine Gross Income Needed
Gross Income = (Desired Net Salary + Business Expenses) / (1 – Tax Rate)
Step 2: Determine Total Billable Hours
Total Hours = Billable Weeks × Billable Hours Per Week
Step 3: Calculate Hourly Rate
Hourly Rate = Gross Income / Total Hours
Realistic Example Scenario
Imagine you want to take home $80,000 a year. You have $6,000 in software, hardware, and marketing costs. You live in an area where your effective tax rate is 30%.
You plan to work 48 weeks a year (taking 4 weeks off). Even though you work 40 hours a week, only 25 hours are "billable" (the rest is spent on admin, sales, and learning).
- Gross Needed: ($80,000 + $6,000) / 0.70 = $122,857
- Total Hours: 48 weeks × 25 hours = 1,200 hours
- Hourly Rate: $122,857 / 1,200 = $102.38 per hour
Factors to Consider Beyond the Math
While the calculator provides a mathematical baseline, you should adjust your final rate based on these SEO-friendly factors:
- Value-Based Pricing: If your work generates $100,000 in revenue for a client, charging $5,000 is a bargain, regardless of how many hours it took you.
- Market Demand: Specialized skills (like AI development or high-stakes legal copywriting) command higher premiums.
- Client Type: Enterprise clients usually have larger budgets but higher administrative requirements than small startups.
- Your Portfolio: A proven track record allows you to charge "expert" rates compared to someone just starting their freelance journey.
Why "Billable Hours" Matter
One of the biggest traps for new freelancers is assuming they will bill 40 hours a week. In reality, most successful freelancers bill between 20 and 30 hours. The remaining time is spent on "non-billable" tasks like invoicing, prospecting for new clients, updating your website, and professional development. Using 20-25 hours in the calculator above provides a much safer financial cushion.