Freelance Hourly Rate Calculator
Calculate exactly what you need to charge per hour to hit your income goals after business expenses.
Your Target Hourly Rate
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How to Calculate Your Freelance Rate
Setting the right freelance rate is the difference between running a sustainable business and burning out. Many freelancers make the mistake of simply matching what they earned in a corporate job, forgetting that as a freelancer, you are responsible for your own taxes, insurance, software, and non-billable time.
The Formula for Success
To find your hourly rate, we use the Bottom-Up Method. This involves calculating your total financial needs first, then dividing them by your actual billable capacity:
(Desired Net Income + Business Expenses) / (Weeks Worked × Billable Hours) = Hourly Rate
Realistic Example:
If you want to take home $60,000 a year and your software, hardware, and marketing cost $5,000, you need a gross revenue of $65,000. If you take 4 weeks off (48 weeks working) and spend 20 hours a week on actual client work (the rest is admin/sales), your rate would be:
$65,000 / (48 × 20) = $67.71 per hour.
If you want to take home $60,000 a year and your software, hardware, and marketing cost $5,000, you need a gross revenue of $65,000. If you take 4 weeks off (48 weeks working) and spend 20 hours a week on actual client work (the rest is admin/sales), your rate would be:
$65,000 / (48 × 20) = $67.71 per hour.
Key Factors to Consider
- Billable vs. Non-Billable: You cannot bill 40 hours a week. Between invoicing, prospecting, and learning, most freelancers only bill 20-30 hours per week.
- The Tax Buffer: Depending on your region, you should likely add 20-30% on top of your net goal to cover self-employment taxes.
- The "Hidden" Costs: Don't forget health insurance, retirement contributions, and your laptop replacement fund.
When to Increase Your Rate
If you are consistently booked at 80% of your capacity, it is time to raise your rates. Most senior freelancers increase their rates by 10-15% annually to account for increased expertise and inflation.