function calculateFreelanceRate() {
var targetNet = parseFloat(document.getElementById('targetIncome').value);
var monthlyExp = parseFloat(document.getElementById('monthlyExpenses').value);
var weeklyHours = parseFloat(document.getElementById('billableHours').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
// Validation
if (isNaN(targetNet) || isNaN(monthlyExp) || isNaN(weeklyHours) || isNaN(weeksOff) || isNaN(taxRate) || isNaN(profitMargin)) {
document.getElementById('errorDisplay').style.display = 'block';
document.getElementById('errorDisplay').innerText = "Please fill out all fields with valid numbers.";
document.getElementById('results').style.display = 'none';
return;
}
if (weeksOff >= 52) {
document.getElementById('errorDisplay').style.display = 'block';
document.getElementById('errorDisplay').innerText = "Weeks off cannot equal or exceed 52.";
return;
}
if (weeklyHours Revenue * (1 – Tax) = BaseNeeds
var revenueBeforeProfit = baseNeeds / (1 – taxDecimal);
// Revenue required including profit margin
// FinalRevenue * (1 – Margin) = RevenueBeforeProfit
var totalGrossNeeded = revenueBeforeProfit / (1 – marginDecimal);
// 3. Calculate Total Billable Hours
var workWeeks = 52 – weeksOff;
var totalBillableHours = workWeeks * weeklyHours;
// 4. Calculate Hourly Rate
var hourlyRate = totalGrossNeeded / totalBillableHours;
// Display Results
document.getElementById('finalRate').innerText = '$' + hourlyRate.toFixed(2);
document.getElementById('grossAnnual').innerText = '$' + totalGrossNeeded.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalHours').innerText = totalBillableHours.toLocaleString();
document.getElementById('overheadCost').innerText = '$' + totalAnnualExpenses.toLocaleString();
document.getElementById('daysOff').innerText = (weeksOff * 5) + " days"; // Assuming 5 day work week
document.getElementById('results').style.display = 'block';
}
How to Calculate Your Freelance Hourly Rate
Determining the right hourly rate is one of the most critical challenges for freelancers and independent contractors. Unlike a salaried employee, your rate must cover not just your desired take-home pay, but also your business overhead, taxes, health insurance, and unpaid time off. Undercharging is the number one reason freelance businesses fail.
This Freelance Hourly Rate Calculator uses a "bottom-up" approach to determine the minimum rate you must charge to sustain your lifestyle and business goals. Instead of guessing based on market averages, it calculates the exact figure based on your specific financial needs.
Key Factors in Your Hourly Rate
Billable vs. Non-Billable Hours: You cannot bill clients for 40 hours a week if you are doing marketing, accounting, and email management. Most freelancers only bill 50-60% of their working time.
The Self-Employment Tax Burden: Employers typically pay half of FICA taxes. As a freelancer, you pay the full 15.3% plus federal and state income taxes. A buffer of 25-30% is standard.
Unpaid Time Off: You don't get paid sick days or holidays. If you plan to take 2 weeks of vacation and anticipate 1 week of sick leave, you must earn enough in the remaining 49 weeks to cover the full year.
Business Overhead: Software subscriptions, hardware upgrades, internet, co-working space fees, and professional insurance must be factored directly into your hourly pricing.
The Calculation Formula
The logic used in this calculator follows these steps to ensure profitability:
Adjusted Gross Income Needed: We add your annual business expenses to your desired net income.
Tax Gross-Up: We divide this sum by (1 – Tax Rate) to determine how much you need to invoice before the government takes its share.
Profit Buffer: We apply your desired profit margin to ensure you are building savings, not just breaking even.
Capacity Calculation: We subtract your vacation and sick weeks from 52, then multiply by your realistic weekly billable hours to find your total annual capacity.
Final Rate: The Total Gross Revenue Needed is divided by your Total Capacity to give you your minimum hourly rate.
Why Your "Employee" Rate Is Not Your Freelance Rate
A common mistake is taking a previous salary (e.g., $50/hour) and using that as a freelance rate. This results in a massive pay cut. To maintain the same standard of living as a salaried employee earning $50/hour, a freelancer often needs to charge between $85 and $100/hour to account for the loss of benefits, employer tax contributions, and unbillable administrative time.
When to Raise Your Rate
If the calculator outputs a number significantly higher than your current rate, don't panic. It indicates you need to either reduce expenses, increase efficiency (billable hours), or, most likely, raise your prices. Use this data to confidentially negotiate with clients, explaining that your rates reflect the true cost of operating a professional service business.