Freelance Hourly Rate Calculator
Determine exactly what to charge to meet your financial goals and cover business overhead.
Minimum Hourly Rate:
$0.00
Total Annual Revenue Needed:
$0.00
Total Annual Billable Hours:
0
Monthly Business Buffer Required:
$0.00
How to Calculate Your Freelance Hourly Rate
Setting a freelance rate is one of the most difficult hurdles for new business owners. If you charge too little, you burn out. If you charge too much without justification, you lose clients. The "Freelance Hourly Rate Calculator" uses a "Bottom-Up" approach to ensure your personal life and business costs are fully funded.
The Formula Behind the Calculator
To find your rate, we use the following logical steps:
- Step 1: Gross Up for Taxes. If you want to take home $60,000 and your tax rate is 25%, you actually need to earn $80,000 before taxes.
- Step 2: Add Business Overhead. Freelancers pay for their own software, hardware, and insurance. We add your monthly expenses multiplied by 12.
- Step 3: Calculate Billable Time. You don't work 365 days a year. We subtract vacation and holidays, then multiply by your billable hours per day (usually lower than 8 due to admin/marketing).
- Step 4: The Division. Total Revenue Needed / Total Billable Hours = Your Rate.
Realistic Example:
If you want a $70,000 salary, have $500/mo in expenses, take 4 weeks off, and can only bill 4 hours a day (spending the rest on sales), your minimum rate would be approximately $100.00 per hour.
If you want a $70,000 salary, have $500/mo in expenses, take 4 weeks off, and can only bill 4 hours a day (spending the rest on sales), your minimum rate would be approximately $100.00 per hour.
Why "Billable Hours" Matter
Many freelancers make the mistake of assuming an 8-hour billable day. In reality, administrative tasks, invoicing, self-promotion, and lead generation take up 30-50% of your time. If you calculate your rate based on 8 hours but only find 4 hours of paid work, you will face a 50% revenue shortfall.