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Freelance Hourly Rate Calculator

Include software, insurance, equipment, and estimated self-employment tax.

Your Recommended Hourly Rate:

$0.00

function calculateHourlyRate() { var salary = parseFloat(document.getElementById('desiredSalary').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); var billableHours = parseFloat(document.getElementById('billableHours').value); var vacationWeeks = parseFloat(document.getElementById('vacationWeeks').value); var resultDiv = document.getElementById('rateResult'); var finalRateDisplay = document.getElementById('finalRate'); var breakdownDisplay = document.getElementById('breakdownText'); if (isNaN(salary) || isNaN(expenses) || isNaN(billableHours) || isNaN(vacationWeeks)) { alert("Please fill in all fields with valid numbers."); return; } if (vacationWeeks >= 52) { alert("Vacation weeks must be less than 52."); return; } var totalRevenueNeeded = salary + expenses; var workingWeeks = 52 – vacationWeeks; var totalAnnualHours = workingWeeks * billableHours; if (totalAnnualHours <= 0) { alert("Total billable hours must be greater than zero."); return; } var hourlyRate = totalRevenueNeeded / totalAnnualHours; finalRateDisplay.innerHTML = "$" + hourlyRate.toFixed(2); breakdownDisplay.innerHTML = "To earn $" + salary.toLocaleString() + " profit, you need to generate $" + totalRevenueNeeded.toLocaleString() + " in total revenue across " + totalAnnualHours + " billable hours per year."; resultDiv.style.display = "block"; }

How to Calculate Your Freelance Hourly Rate

Setting the right price for your freelance services is critical for business sustainability. Many new freelancers make the mistake of simply dividing a corporate salary by 2,080 hours (the standard full-time work year). However, this ignores the overhead costs and non-billable time inherent in self-employment.

Step 1: Determine Your Desired Net Income

This is the amount of money you want to have left in your bank account after all business expenses and taxes are paid. It should cover your personal rent, mortgage, groceries, and savings goals.

Step 2: Account for Business Expenses & Taxes

Unlike an employee, you are responsible for 100% of your costs. You must include:

• Self-Employment Tax: In many regions, you pay both the employer and employee portions of social taxes.
• Software & Subscriptions: Adobe Creative Cloud, CRMs, hosting, and project management tools.
• Health Insurance: Often one of the largest expenses for solo practitioners.
• Hardware: Laptops, monitors, and office furniture (factored by their lifespan).

Step 3: Calculate Realistic Billable Hours

No freelancer is billable 40 hours a week. You must account for "Admin Time" including:

• Marketing and finding new clients.
• Invoicing and bookkeeping.
• Learning new skills and professional development.
• Internal communication and discovery calls.

Most successful freelancers aim for 20 to 30 billable hours per week.

Example Calculation

If you want a $80,000 salary and have $20,000 in annual expenses/taxes, you need $100,000 in gross revenue. If you work 48 weeks a year (4 weeks vacation) at 25 billable hours per week, your total billable hours are 1,200.

$100,000 / 1,200 hours = $83.33 per hour.