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Freelance Hourly Rate Calculator

Software, hardware, office, marketing

Excluding admin/marketing time

Your Recommended Hourly Rate

$0.00

function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('desiredSalary').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); var hoursPerWeek = parseFloat(document.getElementById('billableHours').value); var vacation = parseFloat(document.getElementById('vacationWeeks').value); var taxRate = parseFloat(document.getElementById('taxRate').value) / 100; if (isNaN(salary) || isNaN(expenses) || isNaN(hoursPerWeek) || isNaN(vacation)) { alert("Please enter valid numbers in all fields."); return; } // Total gross income needed (Salary / (1 – tax) + expenses) var totalRequiredGross = (salary / (1 – taxRate)) + expenses; // Working weeks in a year var workingWeeks = 52 – vacation; // Total billable hours per year var totalAnnualHours = workingWeeks * hoursPerWeek; if (totalAnnualHours <= 0) { alert("Working weeks and hours must be greater than zero."); return; } var hourlyRate = totalRequiredGross / totalAnnualHours; var resultDiv = document.getElementById('resultArea'); var rateDisplay = document.getElementById('hourlyResult'); var breakdownDisplay = document.getElementById('breakdownText'); rateDisplay.innerText = "$" + hourlyRate.toFixed(2); breakdownDisplay.innerHTML = "To take home $" + salary.toLocaleString() + " after taxes, you need to earn a gross annual income of $" + Math.round(totalRequiredGross).toLocaleString() + " based on " + totalAnnualHours + " billable hours per year."; resultDiv.style.display = 'block'; }

How to Calculate Your Freelance Hourly Rate

Setting your freelance rate is one of the most critical steps in building a sustainable business. Many new freelancers make the mistake of simply converting a previous salary into an hourly rate, forgetting that as a freelancer, you are responsible for your own taxes, insurance, equipment, and unbillable hours (like marketing and invoicing).

The "Bottom-Up" Formula

This calculator uses the bottom-up approach, which ensures all your costs are covered. The formula is:

Hourly Rate = (Desired Net Income + Taxes + Business Expenses) / (Working Weeks × Billable Hours Per Week)

Key Factors to Consider

• Billable vs. Non-Billable Hours: You likely won't spend 40 hours a week on client work. You need to account for "admin time"—marketing, discovery calls, and bookkeeping. Most freelancers find that 20–25 billable hours is a full-time load.
• Tax Liability: Unlike employees, freelancers pay the full portion of self-employment taxes. Depending on your location, we recommend setting aside 25-35% of your gross income for taxes.
• The "Profit" Margin: Once you find your base rate, consider adding a 10-20% margin for business growth and emergency savings.

Example Calculation

If you want to take home $70,000 a year, have $6,000 in expenses, live in a 25% tax bracket, and want 4 weeks of vacation while working 25 billable hours per week:

1. Gross income needed: ($70,000 / 0.75) + $6,000 = $99,333
2. Working weeks: 52 – 4 = 48 weeks
3. Annual hours: 48 weeks * 25 hours = 1,200 hours
4. Final Rate: $99,333 / 1,200 = $82.77/hour