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Freelance Hourly Rate Calculator

Determine your ideal billable rate based on desired income and expenses.

Your Target Hourly Rate: $0.00

To reach your goals, you need to earn $0 gross per year.

This covers your salary, $0 in taxes, and your business costs.

function calculateFreelanceRate() { var targetIncome = parseFloat(document.getElementById('targetIncome').value); var expenses = parseFloat(document.getElementById('businessExpenses').value); var taxRate = parseFloat(document.getElementById('taxRate').value) / 100; var vacationWeeks = parseFloat(document.getElementById('vacationWeeks').value); var billableHoursPerWeek = parseFloat(document.getElementById('billableHours').value); if (isNaN(targetIncome) || isNaN(expenses) || isNaN(taxRate) || isNaN(vacationWeeks) || isNaN(billableHoursPerWeek) || billableHoursPerWeek <= 0) { alert("Please enter valid positive numbers in all fields."); return; } var totalWorkingWeeks = 52 – vacationWeeks; if (totalWorkingWeeks <= 0) { alert("Vacation weeks cannot be greater than or equal to 52."); return; } var totalBillableHoursPerYear = totalWorkingWeeks * billableHoursPerWeek; // Formula: (Target + Expenses) / (1 – TaxRate) = Gross needed var grossRequired = (targetIncome + expenses) / (1 – taxRate); var taxAmount = grossRequired – targetIncome – expenses; var hourlyRate = grossRequired / totalBillableHoursPerYear; document.getElementById('finalRate').innerText = '$' + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('grossNeeded').innerText = '$' + grossRequired.toLocaleString(undefined, {maximumFractionDigits: 0}); document.getElementById('taxValue').innerText = '$' + taxAmount.toLocaleString(undefined, {maximumFractionDigits: 0}); document.getElementById('rateResult').style.display = 'block'; }

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How to Calculate a Profitable Freelance Hourly Rate

Setting your freelance rate is one of the most critical decisions you will make for your business. Many new freelancers make the mistake of simply matching their previous "employee" hourly wage. However, as a freelancer, you are responsible for costs that an employer used to cover, such as health insurance, software licenses, hardware, and self-employment taxes.

The Factors That Influence Your Rate

• Target Net Income: This is the "take-home" pay you need to cover your personal mortgage, groceries, and lifestyle.
• Business Overhead: Include everything from your Zoom subscription and Adobe Creative Cloud to your laptop amortized over three years.
• Self-Employment Tax: Unlike employees, freelancers often pay the full portion of social security and Medicare. We recommend budgeting at least 25-30% for taxes depending on your jurisdiction.
• The "Billable Hour" Reality: You cannot bill 40 hours a week. A significant portion of your time will be spent on marketing, invoicing, and administrative tasks. Most successful freelancers aim for 20 to 25 billable hours per week.

Example Calculation

If you want to take home $70,000 annually, have $8,000 in business expenses, and expect a 25% tax rate, you actually need a gross revenue of approximately $104,000. If you work 48 weeks a year (4 weeks vacation) at 20 billable hours per week, your hourly rate should be $108.33.

When to Increase Your Rates

SEO experts and consultants suggest reviewing your rates every 6 to 12 months. Common triggers for a rate hike include:

1. Your schedule is consistently 100% booked.
2. You have gained a new certification or specialized skill.
3. Inflation has significantly increased your cost of living.
4. The ROI you provide to clients far exceeds your current billing.

Pro Tip: Always round up your calculated rate to the nearest $5 or $10 increment. It projects confidence and simplifies your invoicing process.