Determine exactly what you need to charge to meet your income goals.
The take-home pay you want before tax.
Software, hardware, insurance, coworking, etc.
Hours actually charged to clients (exclude admin tasks).
Vacation, holidays, and sick days.
Percentage to set aside for taxes.
Total Revenue Needed:–
Total Billable Hours/Year:–
$0.00
Minimum Hourly Rate
How to Calculate Your Freelance Hourly Rate
Setting the right hourly rate is one of the most challenging aspects of freelancing. If you price yourself too low, you risk burnout and financial instability. If you price yourself too high without justification, you may struggle to attract clients. This calculator helps you reverse-engineer your rate based on your real-world financial needs rather than guessing.
The Formula Behind the Calculation
Unlike a salaried employee who gets paid for every hour they are in the office, freelancers only get paid for "billable" hours. Additionally, freelancers must cover their own overhead costs, taxes, and unpaid time off. The formula used in this calculator is:
Minimum Rate = (Desired Net Income + Expenses + Taxes) / Total Billable Hours
Key Factors to Consider
Billable vs. Non-Billable Hours: You might work 40 hours a week, but you likely only bill for 20-25 hours. The rest is spent on marketing, accounting, emailing, and skill development. Never divide your desired income by 40 hours/week.
Business Expenses (Overhead): Remember to factor in health insurance, software subscriptions (Adobe, Office, accounting tools), hardware upgrades, internet, and home office costs.
Taxes: As a freelancer, you are responsible for the full tax burden (self-employment tax). A safe buffer is usually between 25% and 30% of your gross revenue.
Time Off: You don't get paid vacation. If you want 4 weeks off a year, you must earn enough in the remaining 48 weeks to cover that time.
Example Calculation
Let's say you want to take home $60,000 a year.
Expenses: You estimate $5,000 in annual costs.
Taxes: You need to set aside roughly 25% for taxes. To net $60k after taxes and expenses, you actually need a Gross Revenue of roughly $86,666.
Hours: You plan to work 48 weeks a year (4 weeks off) and bill 25 hours a week. That is 1,200 billable hours per year.
Result: $86,666 / 1,200 hours = $72.22 per hour.
In this scenario, charging $75/hour would be your safe baseline to meet your financial goals.
function calculateRate() {
// 1. Get input values
var desiredIncome = parseFloat(document.getElementById('desiredIncome').value);
var expenses = parseFloat(document.getElementById('businessExpenses').value);
var weeklyHours = parseFloat(document.getElementById('billableHours').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var taxRate = parseFloat(document.getElementById('taxBuffer').value);
// 2. Validate inputs
if (isNaN(desiredIncome) || isNaN(expenses) || isNaN(weeklyHours) || isNaN(weeksOff) || isNaN(taxRate)) {
alert("Please enter valid numbers in all fields.");
return;
}
if (weeklyHours <= 0) {
alert("Billable hours must be greater than 0.");
return;
}
// 3. Logic Implementation
// Calculate working weeks
var workingWeeks = 52 – weeksOff;
if (workingWeeks = 1) {
alert("Tax rate cannot be 100% or more.");
return;
}
grossRevenueNeeded = (desiredIncome + expenses) / (1 – taxDecimal);
// Calculate Hourly Rate
var hourlyRate = grossRevenueNeeded / totalBillableHours;
// 4. Update Display
document.getElementById('res-revenue').innerText = "$" + grossRevenueNeeded.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-hours').innerText = totalBillableHours.toLocaleString('en-US');
document.getElementById('res-rate').innerText = "$" + hourlyRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result area
document.getElementById('result-area').style.display = "block";
// Scroll to result on mobile
document.getElementById('result-area').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}