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Freelance Hourly Rate Calculator

Software, hardware, insurance, marketing, taxes.

Actual client work, excluding admin/marketing.

To reach your goal, your hourly rate should be:
function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('targetSalary').value); var expenses = parseFloat(document.getElementById('businessExpenses').value); var hoursPerWeek = parseFloat(document.getElementById('billableHours').value); var weeksOff = parseFloat(document.getElementById('vacationWeeks').value); var resultDiv = document.getElementById('freelanceResult'); var display = document.getElementById('hourlyRateDisplay'); if (isNaN(salary) || isNaN(expenses) || isNaN(hoursPerWeek) || isNaN(weeksOff)) { alert('Please fill in all fields with valid numbers.'); return; } if (weeksOff >= 52) { alert('Weeks off must be less than 52.'); return; } if (hoursPerWeek <= 0) { alert('Billable hours must be greater than 0.'); return; } var workingWeeks = 52 – weeksOff; var totalAnnualBillableHours = workingWeeks * hoursPerWeek; var totalRevenueNeeded = salary + expenses; var rate = totalRevenueNeeded / totalAnnualBillableHours; display.innerHTML = '$' + rate.toFixed(2) + ' / hr'; resultDiv.style.display = 'block'; }

How to Calculate Your Freelance Hourly Rate

Setting the right hourly rate is one of the most critical decisions a freelancer can make. If you set it too low, you risk burnout and financial strain. If you set it too high without justifying the value, you might struggle to land clients. This calculator helps you reverse-engineer your rate based on your lifestyle needs and business costs.

The Realistic Formula for Freelance Pricing

Many new freelancers make the mistake of taking their former corporate salary and dividing it by 2,000 hours (a standard work year). This is a recipe for failure because it ignores three vital factors:

  • Non-Billable Time: You aren't coding or designing 40 hours a week. You are also doing accounting, marketing, and sales.
  • Overhead: You now pay for your own health insurance, software licenses, hardware, and office space.
  • Self-Employment Tax: In many regions, you are responsible for both the employer and employee portions of social security and taxes.

Breakdown of the Calculation

Our calculator uses the following logic to ensure you meet your financial goals:

  1. Total Revenue Goal: We add your desired net salary to your annual business expenses.
  2. Adjusted Work Year: We subtract your intended vacation and sick time from the 52 weeks in a year.
  3. Weekly Capacity: We multiply your billable hours per week (usually 20-30 for full-time freelancers) by your working weeks.
  4. Final Rate: Total Revenue Goal divided by Total Annual Billable Hours.

Real-World Example

Let's say Sarah wants to take home $80,000 a year. Her expenses (insurance, laptop, co-working space, taxes) total $20,000. She wants 4 weeks of vacation and can realistically bill 25 hours per week (leaving 15 hours for admin).

Example Math:
Total Needed: $100,000
Working Weeks: 48 (52 – 4)
Total Hours: 1,200 (48 weeks * 25 hours)
Hourly Rate: $83.33 / hour

Tips for Increasing Your Rate

If the calculated rate feels higher than what your market currently pays, consider these strategies:

  • Niche Down: Generalists are a commodity. Specialists (e.g., "Shopify Expert for Luxury Brands") can command much higher premiums.
  • Value-Based Pricing: For some projects, move away from hourly billing and charge based on the value the project provides to the client's bottom line.
  • Reduce Expenses: Audit your monthly subscriptions. Small "SaaS leak" can add up to thousands of dollars per year.

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