Tax Rate Calculator by State

Freelance Hourly Rate Calculator

Minimum Hourly Rate

$0.00 / hr

function calculateHourlyRate() { // 1. Get input values var targetNet = document.getElementById("targetNetIncome").value; var expenses = document.getElementById("annualExpenses").value; var taxRate = document.getElementById("taxRate").value; var hoursPerWeek = document.getElementById("billableHours").value; var weeksOff = document.getElementById("weeksOff").value; // 2. Validate inputs if (targetNet === "" || expenses === "" || taxRate === "" || hoursPerWeek === "" || weeksOff === "") { alert("Please fill in all fields to calculate your rate."); return; } // Parse numbers var net = parseFloat(targetNet); var exp = parseFloat(expenses); var tax = parseFloat(taxRate); var hours = parseFloat(hoursPerWeek); var off = parseFloat(weeksOff); // Avoid division by zero or negative logic if (tax >= 100) { alert("Tax rate must be less than 100%."); return; } // 3. Calculation Logic // Step A: Calculate Gross Profit Needed (Net Income grossed up for taxes) // Formula: Net = GrossProfit * (1 – TaxRate) => GrossProfit = Net / (1 – TaxRate) var taxMultiplier = 1 – (tax / 100); var grossProfitNeeded = net / taxMultiplier; // Step B: Add Expenses to get Total Revenue Required var totalRevenueNeeded = grossProfitNeeded + exp; // Step C: Calculate Total Billable Hours var workingWeeks = 52 – off; var totalBillableHours = workingWeeks * hours; // Step D: Calculate Hourly Rate var hourlyRate = 0; if (totalBillableHours > 0) { hourlyRate = totalRevenueNeeded / totalBillableHours; } // 4. Update UI document.getElementById("grossRevenueResult").innerText = "$" + totalRevenueNeeded.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("totalHoursResult").innerText = totalBillableHours.toLocaleString(); document.getElementById("hourlyRateResult").innerText = "$" + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " / hr"; // Show results div document.getElementById("calc-results").style.display = "block"; }

How to Calculate Your Ideal Freelance Hourly Rate

Setting the right hourly rate is one of the most critical decisions a freelancer or consultant can make. Price yourself too low, and you risk burnout and financial instability. Price yourself too high without justification, and you may struggle to attract clients. This calculator uses a "bottom-up" approach to determine exactly what you need to charge to meet your financial goals.

Why You Can't Just Pick a Number

Many new freelancers make the mistake of looking at their previous full-time hourly wage and adding a few dollars. This is a mathematical error. As an employee, your employer covered overhead costs, equipment, software, and the "employer portion" of taxes. As a freelancer, you bear 100% of these costs.

The "Billable Hours" Trap: You might work 40 hours a week, but you likely only bill for 20-30 of them. The rest is spent on administration, marketing, and accounting. Your hourly rate must cover these non-billable hours.

Step-by-Step: Understanding the Formula

Our calculator follows a specific financial logic designed for self-employed individuals:

• Target Net Income: This is the cash you want to take home after all business expenses and taxes are paid. Think of this as your "salary."
• Business Expenses: These are deductible costs like web hosting, Adobe Creative Cloud subscriptions, laptop depreciation, and home office costs. These are paid from gross revenue before you pay yourself.
• Tax Burden: Depending on your location, self-employment tax can be significant. The calculator grosses up your desired net income to ensure you have enough left over for the taxman.
• Billable Capacity: If you take 4 weeks off a year and work 5 days a week, that's 240 days. If only 60% of your day is billable, your inventory of hours is limited. The scarcity of your time increases the required rate.

A Realistic Example

Let's look at a graphic designer named Alex. Alex wants to take home $60,000 annually.

• Expenses: $5,000/year (Software, hardware, internet).
• Taxes: Estimated at 25%.
• Time: Alex wants 4 weeks of vacation/sick time and can realistically bill 30 hours per week (leaving 10 hours for admin).

The Math:

To keep $60,000 after 25% taxes, Alex needs ~$80,000 in profit. Adding $5,000 in expenses, the business must generate $85,000 in gross revenue.

With 48 working weeks at 30 hours/week, Alex has 1,440 billable hours.

Result: $85,000 / 1,440 hours = $59.03/hour. This is Alex's "break-even" rate. To be safe, Alex should likely round up to $65 or $75/hour.

Factors to Consider When Finalizing Your Rate

While the calculator gives you a mathematical floor, market conditions dictate the ceiling. Consider these variables:

• Experience Level: Senior experts can charge premiums far above the calculated minimum.
• Project Value: If your work generates $1M for a client, charging $100/hr is too cheap. Consider value-based pricing.
• Retainers: You might offer a lower hourly rate in exchange for a guaranteed monthly retainer, reducing your risk of unbilled weeks.