Determining the right hourly rate is one of the most challenging aspects of freelancing. Unlike a salaried employee, your rate must cover not just your salary, but also your taxes, business expenses, health insurance, and unpaid time spent on administrative tasks. This Freelance Hourly Rate Calculator helps you work backward from your desired lifestyle to find the number you need to quote clients.
The "Billable Hours" Trap
A common mistake new freelancers make is assuming they will bill 40 hours a week. In reality, a significant portion of your week is spent on non-billable tasks such as:
Marketing and finding new clients
Answering emails and administrative work
Accounting and invoicing
Skill development and training
Most successful freelancers only bill between 20 to 30 hours per week. If you calculate your rate based on a 40-hour work week, you will likely fall short of your income goals. Our calculator defaults to conservative estimates to protect your bottom line.
Accounting for Taxes and Overhead
When you are employed, your employer pays a portion of your payroll taxes and provides equipment. As a freelancer, you are the employer. You must account for:
Self-Employment Tax: Covering both the employer and employee share of Social Security and Medicare.
Income Tax: State and federal income tax brackets.
Overhead: Software subscriptions (Adobe, Office, Zoom), hardware upgrades, co-working space fees, and professional insurance.
Why Add a Profit Margin?
Your calculated rate covers your salary and expenses, but a business needs profit to grow. Adding a profit margin (typically 10-20%) allows you to:
Build a rainy day fund for lean months.
Invest in better equipment or outsourcing.
Take unpaid time off without stress.
How to Use This Calculator
To get the most accurate result, enter your Net Target Income—this is the actual cash you want in your bank account at the end of the year for personal spending. Estimate your expenses honestly, and be realistic about how many weeks you take off. The calculator reverses the math to show exactly what you need to charge per hour to make that lifestyle a reality.
function calculateRate() {
// 1. Get input values
var incomeInput = document.getElementById('f_income').value;
var expensesInput = document.getElementById('f_expenses').value;
var hoursInput = document.getElementById('f_hours').value;
var weeksInput = document.getElementById('f_weeks').value;
var taxInput = document.getElementById('f_tax').value;
var profitInput = document.getElementById('f_profit').value;
// 2. Parse values and handle defaults/errors
var netIncome = parseFloat(incomeInput);
var expenses = parseFloat(expensesInput) || 0;
var billableHoursPerWeek = parseFloat(hoursInput);
var weeksOff = parseFloat(weeksInput) || 0;
var taxRate = parseFloat(taxInput) || 0;
var profitMargin = parseFloat(profitInput) || 0;
// Validation
if (isNaN(netIncome) || isNaN(billableHoursPerWeek) || billableHoursPerWeek 52) {
alert("Weeks off cannot exceed 52.");
return;
}
// 3. Logic Calculation
// Calculate total work weeks
var workingWeeks = 52 – weeksOff;
// Calculate total billable hours per year
var totalBillableHours = workingWeeks * billableHoursPerWeek;
if (totalBillableHours <= 0) {
alert("Total working hours must be greater than 0. Check your weeks off or hours per week.");
return;
}
// Calculate Gross Revenue needed
// Formula: Revenue = (Net Income / (1 – TaxRate)) + Expenses
// We also want to add a profit margin on top of the base costs.
// Let's assume Profit Margin is added to the total requirement.
var taxDecimal = taxRate / 100;
var profitDecimal = profitMargin / 100;
// Step A: Calculate Pre-Tax Income needed to hit Net Income
// PreTaxIncome * (1 – TaxRate) = NetIncome
// PreTaxIncome = NetIncome / (1 – TaxRate)
var preTaxIncomeNeeded = 0;
if (taxDecimal < 1) {
preTaxIncomeNeeded = netIncome / (1 – taxDecimal);
} else {
preTaxIncomeNeeded = netIncome; // Fallback if tax is 100% (unrealistic)
}
// Step B: Add Expenses to get Cost Base
var totalCostBase = preTaxIncomeNeeded + expenses;
// Step C: Add Profit Margin (Markup on cost base)
var requiredGrossRevenue = totalCostBase * (1 + profitDecimal);
// Step D: Hourly Rate
var hourlyRate = requiredGrossRevenue / totalBillableHours;
// Step E: Breakdown metrics
var weeklyRevenue = requiredGrossRevenue / workingWeeks;
var dailyRevenue = weeklyRevenue / 5; // Assuming 5 day work week standard
// 4. Update UI
// Format currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById('r_hourly').innerText = formatter.format(hourlyRate);
document.getElementById('r_daily').innerText = formatter.format(dailyRevenue);
document.getElementById('r_weekly').innerText = formatter.format(weeklyRevenue);
document.getElementById('r_annual_gross').innerText = formatter.format(requiredGrossRevenue);
// Show results
document.getElementById('results-area').style.display = 'block';
}