Freelance Hourly & Project Rate Calculator
Minimum Hourly Rate:
$0.00
Target Annual Gross Revenue:
$0.00
Suggested Project Quote:
$0.00
How to Calculate Your Freelance Rate Correctly
Setting your freelance rate is one of the most critical decisions for your business. Many new freelancers make the mistake of simply dividing their previous corporate salary by 2,080 hours. However, this fails to account for self-employment taxes, overhead, and non-billable time spent on marketing and administration.
Key Factors in the Calculation
- Desired Net Income: This is the take-home pay you need to cover your personal life and savings.
- Business Expenses: Software subscriptions, hardware, office space, and health insurance.
- The Tax Gap: As a freelancer, you are responsible for both the employer and employee portions of social security and medicare, plus income tax.
- Billable vs. Non-Billable: You likely won't bill 40 hours a week. Admin, pitching, and learning usually take up 25-40% of your time.
Realistic Example:
If you want to take home $60,000, have $3,600 in annual expenses, and face a 25% tax rate, you actually need a gross revenue of roughly $83,600. If you work 25 billable hours a week for 48 weeks (1,200 hours/year), your hourly rate should be at least $70/hour.
If you want to take home $60,000, have $3,600 in annual expenses, and face a 25% tax rate, you actually need a gross revenue of roughly $83,600. If you work 25 billable hours a week for 48 weeks (1,200 hours/year), your hourly rate should be at least $70/hour.
Project-Based Pricing vs. Hourly
Once you know your hourly floor, you can calculate project quotes. If a website build takes 20 hours, your base quote should be your hourly rate multiplied by 20. Many experts recommend adding a 10-20% "buffer" to project quotes to account for unexpected revisions or scope creep.