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Freelance Hourly Rate Calculator

Recommended Hourly Rate:

function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('targetSalary').value); var expenses = parseFloat(document.getElementById('businessExpenses').value); var hours = parseFloat(document.getElementById('billableHours').value); var weeks = parseFloat(document.getElementById('weeksOff').value); var resultArea = document.getElementById('resultArea'); var hourlyOutput = document.getElementById('hourlyRateOutput'); var breakdownOutput = document.getElementById('breakdownOutput'); if (isNaN(salary) || isNaN(expenses) || isNaN(hours) || isNaN(weeks) || hours = 52) { alert("Weeks off must be less than 52."); return; } var totalRevenueNeeded = salary + expenses; var workingWeeks = 52 – weeks; var totalAnnualBillableHours = workingWeeks * hours; var rawRate = totalRevenueNeeded / totalAnnualBillableHours; // Adjust for self-employment tax and buffer (approx 20% for safety) var recommendedRate = rawRate; resultArea.style.display = 'block'; hourlyOutput.innerHTML = '$' + recommendedRate.toFixed(2); breakdownOutput.innerHTML = 'To net $' + salary.toLocaleString() + ' after $' + expenses.toLocaleString() + ' in expenses, you need to earn $' + totalRevenueNeeded.toLocaleString() + ' annually. Over ' + workingWeeks + ' weeks at ' + hours + ' billable hours per week, you must charge this minimum rate.'; }

How to Determine Your Freelance Hourly Rate

Transitioning from a traditional 9-to-5 job to freelancing requires a fundamental shift in how you view your income. Unlike a salaried employee, a freelancer is a business owner. This means your hourly rate must cover more than just your "take-home" pay; it must cover taxes, insurance, software, marketing, and unbillable administrative time.

1. Calculate Your Target Take-Home Pay

Start with the annual salary you would expect for your role in a corporate setting. If a Senior Designer makes $80,000, use that as your baseline. Remember that as a freelancer, you are responsible for 100% of your healthcare premiums and retirement contributions, so many experts recommend adding 20% to your "desired" salary to match corporate benefits.

2. Factor in Business Overhead

Expenses often catch new freelancers by surprise. Common costs include:

  • Software subscriptions (Adobe Creative Cloud, Office 365, CRM tools).
  • Hardware maintenance and upgrades.
  • Self-employment taxes (often significantly higher than employee taxes).
  • Legal fees and accounting software.
  • Professional development and courses.

3. Billable vs. Non-Billable Hours

You cannot work 40 billable hours a week. A significant portion of your time will be spent on "non-billable" tasks such as invoicing, pitching new clients, and administrative work. Most successful freelancers find that they average between 20 to 30 billable hours per week. If you base your rate on a 40-hour work week, you will likely fall short of your financial goals.

Example Calculation

If you want to earn $60,000 a year, have $10,000 in expenses, and plan to work 25 billable hours a week with 4 weeks of vacation:

  • Total Revenue Needed: $70,000
  • Working Weeks: 48 (52 – 4)
  • Total Annual Hours: 1,200 (48 weeks × 25 hours)
  • Required Rate: $58.33 per hour

By using this formula, you ensure that your freelance business is sustainable, profitable, and capable of supporting your lifestyle long-term.

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