Freelance Hourly Rate Calculator
Calculate exactly what you need to charge to hit your income goals and cover business overhead.
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 dividing a "corporate" salary by 2,080 hours (the standard full-time year). However, this fails to account for taxes, non-billable time, and overhead expenses.
1. Factor in Your Business Expenses
As a freelancer, you are responsible for your own software subscriptions, hardware, office space, insurance, and professional services like accounting. These must be added on top of your desired take-home pay.
2. Accounting for Non-Billable Time
You won't spend 40 hours a week on client work. Marketing, invoicing, prospecting, and administrative tasks take up significant time. Most successful freelancers find that only 20 to 30 hours per week are actually "billable."
3. The "Tax Trap"
Unlike a W-2 employee, you pay both the employer and employee portions of social security and medicare (Self-Employment Tax in the US). Always add at least 25-30% to your base rate to ensure you have enough set aside for the IRS or your local tax authority.
Practical Example
If you want to take home $60,000 a year, have $3,000 in expenses, and plan to work 48 weeks at 25 billable hours per week:
- Total Revenue Needed: $63,000
- Total Billable Hours: 1,200 (48 weeks * 25 hours)
- Base Rate: $52.50 per hour
- Rate with 25% Tax: ~$70.00 per hour
Using the calculator above, you can tweak these numbers to find a rate that supports your lifestyle and business growth.