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Freelance Hourly Rate Calculator

Calculate exactly what you need to charge to cover your salary, expenses, and taxes.

You should charge: $0.00
function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('desiredSalary').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); var hoursPerWeek = parseFloat(document.getElementById('billableHours').value); var weeksOff = parseFloat(document.getElementById('vacationWeeks').value); var taxRate = parseFloat(document.getElementById('taxRate').value); var resultDiv = document.getElementById('rateResult'); if (isNaN(salary) || isNaN(expenses) || isNaN(hoursPerWeek) || isNaN(weeksOff) || isNaN(taxRate)) { alert("Please fill in all fields with valid numbers."); return; } // Calculations var effectiveWeeks = 52 – weeksOff; var totalBillableHoursYear = effectiveWeeks * hoursPerWeek; // We need to earn enough so that after taxes, we have (Salary + Expenses) // Math: PreTaxIncome * (1 – (taxRate/100)) = Salary + Expenses var targetGrossRevenue = (salary + expenses) / (1 – (taxRate / 100)); var hourlyRate = targetGrossRevenue / totalBillableHoursYear; // Display Results document.getElementById('hourlyRateOutput').innerText = "$" + hourlyRate.toFixed(2) + " / hr"; var breakdownHtml = "Annual Billable Hours: " + totalBillableHoursYear + " hrs" + "Required Gross Revenue: $" + targetGrossRevenue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " (includes taxes)"; document.getElementById('breakdownOutput').innerHTML = breakdownHtml; resultDiv.style.display = "block"; }

How to Use the Freelance Hourly Rate Calculator

Transitioning from a full-time job to freelancing often leads to the "underpricing trap." Many new freelancers simply take their old salary and divide it by 2,000 hours, forgetting that as a business owner, you are responsible for your own taxes, equipment, and unbillable time.

Key Factors in Your Calculation

  • Desired Annual Salary: This is the "take-home" amount you want to live on after business expenses and taxes.
  • Business Expenses: Include software subscriptions (Adobe, Office 365), hardware, office rent, internet, and professional insurance.
  • Billable Hours: You cannot bill 40 hours a week. You must account for "admin time"—marketing, invoicing, and discovery calls. A realistic range for most freelancers is 20-30 billable hours.
  • Tax Rate: Remember to account for self-employment tax. In many regions, setting aside 25-30% is a safe baseline.

A Realistic Example

Let's say you want to earn $70,000 a year. You have $5,000 in annual expenses and want 4 weeks of vacation. You estimate you can bill 25 hours per week and your tax rate is 25%.

The Math:
Total Weeks Worked: 48
Total Hours: 48 * 25 = 1,200 hours
Target Gross Revenue: ($70,000 + $5,000) / 0.75 = $100,000
Resulting Hourly Rate: $83.33

Why Profit Margin Matters

If you want to grow your business, you should charge even more than this calculator suggests. Adding a 10-20% "profit margin" on top of your hourly rate provides a safety net for slow months or funds for future business investments.

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