function calculateFreelanceRate() {
// 1. Get input values
var netIncomeInput = document.getElementById("desiredNetIncome").value;
var monthlyExpInput = document.getElementById("monthlyExpenses").value;
var billableHoursInput = document.getElementById("billableHours").value;
var weeksOffInput = document.getElementById("weeksOff").value;
var taxRateInput = document.getElementById("taxRate").value;
var profitMarginInput = document.getElementById("profitMargin").value;
// 2. Validate inputs
if (netIncomeInput === "" || billableHoursInput === "") {
alert("Please enter at least your desired income and billable hours.");
return;
}
var netIncome = parseFloat(netIncomeInput);
var monthlyExp = parseFloat(monthlyExpInput) || 0;
var billableHours = parseFloat(billableHoursInput);
var weeksOff = parseFloat(weeksOffInput) || 0;
var taxRate = parseFloat(taxRateInput) || 0;
var profitMargin = parseFloat(profitMarginInput) || 0;
// 3. Perform Calculations
// Annual Business Overhead
var annualOverhead = monthlyExp * 12;
// Calculate Workable Time
var totalWeeks = 52;
var workingWeeks = totalWeeks – weeksOff;
// Safety check for working weeks
if (workingWeeks <= 0) {
alert("Weeks off cannot equal or exceed 52 weeks.");
return;
}
var totalBillableHours = workingWeeks * billableHours;
// Safety check for billable hours
if (totalBillableHours Gross = Net / (1 – TaxRate)
var taxDecimal = taxRate / 100;
var grossIncomeForSalary = netIncome / (1 – taxDecimal);
// Total Revenue Required (Salary + Expenses)
var totalBaseRevenue = grossIncomeForSalary + annualOverhead;
// Add Profit Margin on top of base revenue
// Revenue = Base / (1 – ProfitMargin)
var profitDecimal = profitMargin / 100;
var totalRevenueRequired = totalBaseRevenue / (1 – profitDecimal);
// Calculate Estimated Taxes (on the gross revenue minus expenses usually, simplified here to reflect the burden added)
// Strictly speaking, tax is usually on profit, but for pricing, we calculate the load.
// We will display the difference between Total Revenue and (Net Income + Expenses + Profit) as the Tax/Burden wedge.
var estimatedTaxAmount = totalRevenueRequired – annualOverhead – netIncome – (totalRevenueRequired * profitDecimal);
// *Correction for clearer display logic*: Let's just show the gap between Revenue and Take-home+Expenses.
// Let's refine the tax calculation for display:
// Taxable Income approx = Total Revenue – Expenses.
// Tax = (Total Revenue – Expenses) * TaxRate.
// This is complex because we derived revenue FROM net.
// Let's stick to the difference for simplicity in display.
var taxDisplay = totalRevenueRequired – (netIncome + annualOverhead);
// Hourly Rate Calculation
var hourlyRate = totalRevenueRequired / totalBillableHours;
// 4. Update UI
document.getElementById("grossRevenueResult").innerText = "$" + totalRevenueRequired.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("hoursResult").innerText = totalBillableHours.toLocaleString('en-US');
document.getElementById("taxResult").innerText = "$" + taxDisplay.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("hourlyRateResult").innerText = "$" + hourlyRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resultBox").style.display = "block";
}
How to Calculate Your Freelance Hourly Rate
Transitioning from a salaried employee to a freelancer requires a fundamental shift in how you view your income. One of the most common mistakes new freelancers make is attempting to match their previous hourly wage directly. This approach often leads to burnout and financial struggle because it fails to account for the "hidden costs" of self-employment.
Using a Freelance Hourly Rate Calculator is essential to ensure that your pricing covers not just your desired take-home pay, but also your taxes, overhead, and non-billable administrative time.
Key Rule: Your freelance hourly rate should typically be 2x to 2.5x higher than your equivalent salaried hourly wage to maintain the same standard of living.
1. The Difference Between Billable and Non-Billable Hours
When you are employed, you get paid for 40 hours a week regardless of whether you are in a meeting, at the water cooler, or doing actual work. As a freelancer, you are only paid for billable hours—the specific time spent working on client projects.
You must factor in non-billable tasks, which include:
Marketing and business development (finding new clients).
Invoicing and bookkeeping.
Responding to emails and project management.
Continuing education and skill building.
If you plan to work 40 hours a week, realistically only 20 to 25 of those hours might be billable. Our calculator adjusts your rate so these "unpaid" hours are covered by your paying clients.
2. Accounting for Overhead and Expenses
Employees have their equipment, software, and health insurance subsidized or provided by their employer. As a freelancer, these are your overhead costs. These must be added to your gross revenue targets before you calculate your hourly rate.
Hardware: Laptops, cameras, monitors.
Software Subscriptions: Adobe CC, Microsoft Office, Hosting, SaaS tools.
Workspace: Co-working space fees or home office portion of utilities.
Professional Services: Accountant fees, legal advice, business insurance.
3. Taxes and Self-Employment Considerations
In many jurisdictions (like the US), freelancers are responsible for the full burden of Social Security and Medicare taxes (Self-Employment Tax), whereas employees only pay half. Additionally, you do not get paid vacation or sick leave.
To protect your income, this calculator helps you:
Define a target Net Income (what you actually want to put in your bank).
Reverse-calculate the tax burden so you can set aside money for the government.
Factor in weeks off so you can afford to take a vacation without losing money.
4. Why Profit Margin Matters
Many freelancers calculate a "break-even" rate that covers their salary and expenses. However, a business needs profit to grow. Adding a profit margin (typically 10-20%) allows you to:
Build a cash reserve for lean months.
Invest in better equipment or training.
Hire subcontractors during busy periods.
Use the calculator above to experiment with different profit margins and see how they impact your minimum hourly rate.