function calculateFreelanceRate() {
var targetNet = parseFloat(document.getElementById('targetSalary').value);
var monthlyExp = parseFloat(document.getElementById('monthlyOverhead').value);
var hoursPerWeek = parseFloat(document.getElementById('billableHours').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var errorMsg = document.getElementById('error-msg');
var resultsArea = document.getElementById('resultsArea');
// Input Validation
if (isNaN(targetNet) || isNaN(monthlyExp) || isNaN(hoursPerWeek) || isNaN(weeksOff) || isNaN(taxRate)) {
errorMsg.style.display = 'block';
resultsArea.style.display = 'none';
return;
}
if (weeksOff >= 52) {
alert("Weeks off cannot be 52 or more.");
return;
}
errorMsg.style.display = 'none';
// 1. Calculate Gross Income Needed (Pre-tax)
// Net = Gross * (1 – TaxRate) -> Gross = Net / (1 – TaxRate)
var taxDecimal = taxRate / 100;
var grossIncomeNeeded = targetNet / (1 – taxDecimal);
// 2. Add Annual Overhead
var annualOverhead = monthlyExp * 12;
var totalRevenueRequired = grossIncomeNeeded + annualOverhead;
// 3. Calculate Available Billable Hours
var workingWeeks = 52 – weeksOff;
var annualBillableHours = workingWeeks * hoursPerWeek;
// 4. Calculate Rate
var hourlyRate = 0;
if (annualBillableHours > 0) {
hourlyRate = totalRevenueRequired / annualBillableHours;
}
// Display Results
document.getElementById('hourlyRateResult').innerHTML = '$' + hourlyRate.toFixed(2);
document.getElementById('totalRevenueResult').innerHTML = '$' + totalRevenueRequired.toLocaleString('en-US', {maximumFractionDigits: 0});
document.getElementById('totalHoursResult').innerHTML = annualBillableHours.toLocaleString();
resultsArea.style.display = 'block';
}
How to Calculate Your Freelance Hourly Rate
Setting the right hourly rate is one of the most challenging aspects of freelancing. Unlike a salaried employee, your rate must cover not just your take-home pay, but also your taxes, business expenses, insurance, and unpaid time off. This calculator helps you work backward from your desired lifestyle to find the minimum rate you must charge to sustain it.
Understanding the Formula
Many new freelancers make the mistake of simply dividing their desired salary by 2,080 (the standard number of working hours in a year). This approach often leads to burnout and financial struggle. To calculate a sustainable rate, you must account for three critical factors:
Non-Billable Time: You cannot bill clients for marketing, accounting, or finding new work. If you work 40 hours a week, you might only be able to bill 25 or 30 of those hours.
Overhead Costs: Software subscriptions, hardware upgrades, internet, and co-working space fees must be paid from your gross revenue before you pay yourself.
Taxes and Benefits: As a freelancer, you are responsible for the employer portion of taxes and your own health insurance and retirement contributions.
Step-by-Step Calculation Logic
Determine Net Income: Start with the amount of money you need in your bank account annually to pay personal bills and save.
Factor in Taxes: Gross up your net income to account for self-employment tax and income tax. A safe buffer is often 25-30%.
Add Business Expenses: Add your annual business overhead to the gross income figure. This gives you your Total Revenue Requirement.
Calculate Billable Capacity: Subtract vacation and sick weeks from 52. Multiply the remaining weeks by your realistic billable hours per week.
Divide: Total Revenue Requirement divided by Annual Billable Hours equals your Minimum Hourly Rate.
Why Billable Hours Matter
The "Billable Hours Per Week" input is the most sensitive variable in this calculator. While you may sit at your desk for 40 hours, administrative tasks often consume 20-30% of that time. A realistic billable target for most freelancers is between 25 and 30 hours per week. Inputting a number higher than this requires a very efficient pipeline of work and minimal administrative drag.
Adjusting for Value-Based Pricing
The rate provided by this calculator is your floor—the minimum you need to charge to survive. It does not account for the market value of your specific skills, the demand in your niche, or the ROI you provide to clients. Once you know your minimum, you should assess the market rates. If the market supports a rate double your minimum, you should charge that to build a safety net and grow your business.