Determine exactly what you need to charge to meet your income goals.
Minimum Hourly Rate
$0.00
Total Gross Revenue Needed
$0.00
Estimated Annual Taxes
$0.00
function calculateFreelanceRate() {
// Get inputs
var netGoal = parseFloat(document.getElementById('frc-annual-goal').value);
var monthlyExp = parseFloat(document.getElementById('frc-expenses').value);
var taxRate = parseFloat(document.getElementById('frc-tax-rate').value);
var weeksOff = parseFloat(document.getElementById('frc-weeks-off').value);
var hoursPerWeek = parseFloat(document.getElementById('frc-billable-hours').value);
// Validation
if (isNaN(netGoal) || isNaN(monthlyExp) || isNaN(taxRate) || isNaN(weeksOff) || isNaN(hoursPerWeek)) {
alert("Please fill in all fields with valid numbers.");
return;
}
if (hoursPerWeek 0.75X = 81000 -> X = 108,000
var taxDecimal = taxRate / 100;
var grossRevenueNeeded = 0;
if (taxDecimal >= 1) {
alert("Tax rate cannot be 100% or more.");
return;
}
grossRevenueNeeded = (netGoal + annualExpenses) / (1 – taxDecimal);
// 3. Calculate Billable Hours
var workingWeeks = 52 – weeksOff;
if (workingWeeks <= 0) {
alert("You cannot take 52 or more weeks off.");
return;
}
var totalBillableHours = workingWeeks * hoursPerWeek;
// 4. Calculate Hourly Rate
var hourlyRate = grossRevenueNeeded / totalBillableHours;
var taxAmount = grossRevenueNeeded – (netGoal + annualExpenses);
// Display Results
document.getElementById('frc-hourly-rate').innerHTML = '$' + hourlyRate.toFixed(2);
document.getElementById('frc-gross-revenue').innerHTML = '$' + grossRevenueNeeded.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('frc-tax-amount').innerHTML = '$' + taxAmount.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('frc-result-container').style.display = 'block';
}
Understanding Your Freelance Hourly Rate
Setting the right hourly rate is one of the most critical decisions a freelancer or consultant makes. Unlike a salaried employee, your rate must cover not just your take-home pay, but also your business overhead, taxes, and unpaid time off. This calculator helps you reverse-engineer your rate based on your lifestyle and financial goals.
1. The "Billable Hours" Trap
Many new freelancers make the mistake of dividing their desired annual salary by 2,080 (a standard 40-hour work week x 52 weeks). This inevitably leads to undercharging. As a business owner, you cannot bill for every hour you work. Administrative tasks, marketing, accounting, and client acquisition are non-billable.
A realistic billable load is often between 20 to 30 hours per week. Inputting a lower number in the "Billable Hours" field above will result in a higher required rate, protecting you from burnout.
2. Factoring in Overhead and Taxes
Your gross revenue is not your net income. Before you pay yourself, you must pay your business expenses (software subscriptions, internet, equipment) and the government.
Self-Employment Tax: In many jurisdictions, freelancers pay both the employer and employee portion of social security and medicare taxes.
Operating Costs: Even lean digital businesses have monthly costs. These reduce your taxable income but require cash flow to maintain.
3. Why Vacation Time Matters
Salaried employees get paid vacation; freelancers do not. If you want to take 4 weeks off per year, you must earn enough in the remaining 48 weeks to cover your expenses during your time off. This calculator subtracts your "Weeks Off" input from the standard 52-week year to ensure your working hours subsidize your rest.
How to Use the Result
Once you calculate your Minimum Hourly Rate, consider this your "floor." It is the lowest amount you can charge to meet your financial obligations. Depending on your market value, experience, and demand, you should aim to price above this floor to generate profit margin for business growth and savings.