Software, hardware, insurance, estimated taxes, etc.
Hours you actually charge clients (exclude admin work).
Vacation, sick days, and holidays.
Minimum Hourly Rate$0.00
Total Revenue Needed (Gross)$0.00
Total Billable Hours / Year0
Monthly Revenue Target$0.00
function calculateRate() {
// Get input values
var incomeInput = document.getElementById("annualIncome").value;
var expensesInput = document.getElementById("annualExpenses").value;
var hoursInput = document.getElementById("billableHours").value;
var weeksOffInput = document.getElementById("weeksOff").value;
// Parse values
var desiredIncome = parseFloat(incomeInput);
var expenses = parseFloat(expensesInput);
var weeklyHours = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksOffInput);
// Validation
if (isNaN(desiredIncome) || isNaN(expenses) || isNaN(weeklyHours) || isNaN(weeksOff)) {
alert("Please fill in all fields with valid numbers.");
return;
}
if (weeklyHours <= 0) {
alert("Billable hours must be greater than 0.");
return;
}
// Logic
// 1. Calculate total revenue needed (Net Income + Expenses)
var totalRevenueNeeded = desiredIncome + expenses;
// 2. Calculate total working weeks (52 – weeks off)
var workingWeeks = 52 – weeksOff;
if (workingWeeks <= 0) {
alert("Weeks off cannot equal or exceed 52.");
return;
}
// 3. Calculate total billable hours per year
var totalBillableHours = workingWeeks * weeklyHours;
// 4. Calculate Hourly Rate
var hourlyRate = totalRevenueNeeded / totalBillableHours;
// 5. Calculate Monthly Target (Total Revenue / 12)
var monthlyTarget = totalRevenueNeeded / 12;
// Display Results
document.getElementById("hourlyRate").innerHTML = "$" + hourlyRate.toFixed(2);
document.getElementById("totalRevenue").innerHTML = "$" + totalRevenueNeeded.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalHours").innerHTML = totalBillableHours.toLocaleString();
document.getElementById("monthlyTarget").innerHTML = "$" + monthlyTarget.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result section
document.getElementById("results").style.display = "block";
}
How to Calculate Your Freelance Hourly Rate
Setting the right hourly rate is one of the most critical decisions you will make as a freelancer or consultant. If you charge too little, you risk burnout and financial instability. If you charge too much without justification, you may struggle to attract clients. This Freelance Hourly Rate Calculator is designed to work backward from your financial goals to determine exactly what you need to charge to sustain your lifestyle and business.
Understanding the Formula
Many new freelancers make the mistake of simply dividing their desired annual salary by 2,080 (the standard number of work hours in a 40-hour week year). This approach is flawed because it ignores three critical factors of freelancing:
Unbillable Time: Unlike an employee, you cannot bill for administrative tasks, marketing, pitching, or invoicing.
Overhead Costs: You are responsible for your own hardware, software subscriptions, health insurance, and self-employment taxes.
Time Off: You don't get paid vacation or sick leave unless you factor it into your rate beforehand.
Step-by-Step Guide to Using This Calculator
To get the most accurate result, you need to be realistic about your inputs. Here is a breakdown of what each field represents:
1. Desired Annual Net Income
This is your "take-home" pay. Think about what salary you would earn in a full-time role for your skill level, or calculate your personal living expenses plus savings goals. Do not include business taxes here; we account for those in expenses.
2. Annual Business Expenses & Taxes
Freelancers often underestimate their overhead. When calculating this number, ensure you include:
This is the most difficult number to estimate. While you might work 40 hours a week, you likely won't be billing 40 hours. A healthy freelance business usually sees a utilization rate of 50% to 70%. This means if you work a standard week, you might only bill 20 to 25 hours. The rest of your time is spent finding work, managing clients, and administrative upkeep.
4. Weeks Off per Year
Burnout is real. Ensure you factor in at least 2 weeks for vacation, 1 week for holidays, and 1 week for potential sick days. Entering "0" here is a recipe for exhaustion.
Analyzing Your Results
Once you hit calculate, you might find the "Minimum Hourly Rate" is higher than you expected. This is normal. Freelance rates must be higher than employee hourly wages to cover the lack of benefits and job security.
Total Revenue Needed: This is your gross revenue target. It's the total amount you need to invoice clients to cover both your salary and your business costs.
Monthly Revenue Target: Use this as a KPI (Key Performance Indicator). If you hit this number consistently, you are on track to meet your annual goals.
What If My Rate is Too High?
If the calculator produces a rate that is significantly higher than the market average for your industry, you have a few levers to pull:
Reduce Expenses: Look for subscriptions to cancel or cheaper alternatives.
Increase Efficiency: Find ways to increase your billable hours by automating administrative tasks.
Specialize: Niche down to command higher rates in specialized fields.
Use this tool periodically as your business grows to ensure your pricing evolves with your financial needs.