Calculate exactly what you need to charge to meet your financial goals.
Remember: Admin/Marketing is not billable.
Include holidays and sick days.
Calculation Results
Required Rate: $0.00 / hour
How to Set 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 matching their previous "salary" hourly rate. However, as a freelancer, you are a business owner responsible for your own taxes, healthcare, equipment, and non-billable time.
Understanding the Math
To find your ideal rate, you must work backward from your lifestyle goals:
The Tax Gap: Unlike employees, freelancers pay both halves of social security/Medicare taxes. Usually, setting aside 25-30% for taxes is a safe starting point.
Non-Billable Time: You won't spend 40 hours a week doing "client work." You will spend time on invoicing, pitching, marketing, and learning. Most freelancers find that only 60-70% of their time is actually billable.
Overhead: This includes software subscriptions (Adobe, Office, CRM), hardware, internet, office space, and professional insurance.
Example Calculation
If you want to take home $70,000 annually, have $5,000 in expenses, live in a 25% tax bracket, take 4 weeks of vacation, and work 25 billable hours per week:
Adjust for taxes: $70,000 / (1 – 0.25) = $93,333 gross needed for personal income.
Add expenses: $93,333 + $5,000 = $98,333 total revenue target.
function calculateFreelanceRate() {
var desiredIncome = parseFloat(document.getElementById("desiredIncome").value);
var annualExpenses = parseFloat(document.getElementById("annualExpenses").value);
var billableHours = parseFloat(document.getElementById("billableHours").value);
var vacationWeeks = parseFloat(document.getElementById("vacationWeeks").value);
var taxRate = parseFloat(document.getElementById("taxRate").value);
// Validation
if (isNaN(desiredIncome) || isNaN(annualExpenses) || isNaN(billableHours) || isNaN(vacationWeeks) || isNaN(taxRate)) {
alert("Please fill out all fields with valid numbers.");
return;
}
if (taxRate >= 100) {
alert("Tax rate must be less than 100%.");
return;
}
if (vacationWeeks >= 52) {
alert("Vacation weeks must be less than 52.");
return;
}
// Calculation Logic
// 1. Calculate Gross Income needed to net the desired income after taxes
var decimalTax = taxRate / 100;
var grossPersonalIncome = desiredIncome / (1 – decimalTax);
// 2. Add business expenses (expenses are usually pre-tax deductions)
var totalRevenueNeeded = grossPersonalIncome + annualExpenses;
// 3. Calculate total billable hours per year
var workWeeks = 52 – vacationWeeks;
var totalAnnualHours = workWeeks * billableHours;
// 4. Calculate final hourly rate
var hourlyRate = totalRevenueNeeded / totalAnnualHours;
// Formatting result
var resultElement = document.getElementById("hourlyResult");
var summaryElement = document.getElementById("summaryText");
var resultArea = document.getElementById("resultArea");
resultElement.innerText = "$" + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
summaryElement.innerHTML = "To net $" + desiredIncome.toLocaleString() + " after taxes, you need a total annual revenue of $" + Math.round(totalRevenueNeeded).toLocaleString() + ". Working " + totalAnnualHours + " billable hours per year, your minimum rate is $" + hourlyRate.toFixed(2) + " per hour.";
resultArea.style.display = "block";
resultArea.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}