Determine your ideal hourly rate based on income goals and expenses.
Hrs
Weeks
Minimum Hourly Rate:–
Daily Rate (approx):–
Weekly Rate (approx):–
Total Billable Hours/Year:–
function calculateRate() {
// Get input values
var incomeInput = document.getElementById("desiredIncome").value;
var expensesInput = document.getElementById("annualExpenses").value;
var hoursInput = document.getElementById("billableHours").value;
var weeksOffInput = document.getElementById("weeksOff").value;
// Validate inputs
if (incomeInput === "" || hoursInput === "") {
alert("Please enter at least your Target Income and Billable Hours.");
return;
}
// Parse values
var income = parseFloat(incomeInput) || 0;
var expenses = parseFloat(expensesInput) || 0;
var weeklyHours = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksOffInput) || 0;
// Logic: Calculate Total Revenue Needed
var totalRevenueNeeded = income + expenses;
// Logic: Calculate Total Working Weeks
var totalWeeks = 52;
var workingWeeks = totalWeeks – weeksOff;
if (workingWeeks <= 0) {
alert("Weeks off cannot equal or exceed 52 weeks.");
return;
}
// Logic: Calculate Total Billable Hours per Year
var totalBillableHours = workingWeeks * weeklyHours;
if (totalBillableHours <= 0) {
alert("Total billable hours must be greater than zero.");
return;
}
// Logic: Calculate Rates
var hourlyRate = totalRevenueNeeded / totalBillableHours;
var dailyRate = hourlyRate * (weeklyHours / 5); // Assuming 5 day work week average for daily rate context
var weeklyRate = hourlyRate * weeklyHours;
// Display Results
document.getElementById("results-area").style.display = "block";
document.getElementById("hourlyResult").innerText = "$" + hourlyRate.toFixed(2);
document.getElementById("dailyResult").innerText = "$" + dailyRate.toFixed(2);
document.getElementById("weeklyResult").innerText = "$" + weeklyRate.toFixed(2);
document.getElementById("totalHoursResult").innerText = Math.round(totalBillableHours).toLocaleString();
}
Understanding Your Freelance Rate
Setting the correct hourly or project rate is one of the most challenging aspects of freelancing and consulting. Unlike a salaried employee, a freelancer must account for non-billable time, business overhead, taxes, and periods of inactivity. This Free Rate Calculator helps you work backward from your desired lifestyle and income goals to determine exactly what you need to charge clients.
Why You Can't Just Divide Salary by 2,080
A standard full-time employee works approximately 2,080 hours per year (40 hours x 52 weeks). However, using this divisor is a critical mistake for freelancers. You must account for:
Unpaid Time Off: You do not get paid for sick days, holidays, or vacations.
Non-Billable Hours: Marketing, accounting, answering emails, and finding new clients are hours you work but cannot invoice.
Overhead: You are responsible for your own health insurance, software subscriptions, hardware, and self-employment taxes.
The Golden Rule: Most successful freelancers aim for a "utilization rate" of roughly 60-70%. This means if you work a 40-hour week, likely only 25-28 of those hours are actually billable to a client.
How the Calculation Works
This calculator uses a "bottom-up" approach to pricing:
Total Revenue Target: We combine your desired net income with your estimated business expenses and taxes.
Effective Working Time: We subtract your planned vacation and time off from the 52-week year.
Billable Capacity: We multiply your available weeks by the number of hours you can realistically bill per week (excluding admin time).
Final Rate: The total revenue target is divided by your billable capacity to produce your break-even hourly rate.
Example Calculation
Let's say you want to earn a net income of $80,000 per year.
Expenses & Taxes: You estimate $20,000 for overhead and tax set-asides.
Total Goal: $100,000.
Time Off: You plan to take 4 weeks off per year (48 working weeks).
Capacity: You can bill 25 hours per week (leaving 15 hours for admin).