Freelance Rate Calculator
The take-home pay you want after taxes.
Software, hardware, insurance, coworking.
Hours actually billed to clients (excludes admin).
Vacation, sick days, and holidays.
Self-employment + income tax buffer.
You need to charge at least:
$0.00 / hr
Gross Revenue Needed: $0
Why You Are Likely Undercharging as a Freelancer
One of the most common mistakes new freelancers make is attempting to match their previous full-time hourly wage. If you earned $40/hour at your day job, charging $40/hour as a freelancer will likely result in a 30-50% pay cut. Why? Because an employee's salary is net of overhead, and employers cover the "hidden" costs of employment.
As a freelancer, you are the business. You must cover the employer's share of taxes, health insurance, retirement contributions, software subscriptions, hardware costs, and unpaid administrative time.
Understanding the Formula: Billable vs. Non-Billable Hours
This Freelance Hourly Rate Calculator uses a "Reverse Income" methodology to determine your true rate. The critical factor often overlooked is Billable Efficiency.
In a typical 40-hour work week, a freelancer rarely bills 40 hours. You spend time on:
- Marketing and business development (unpaid)
- Invoicing and accounting (unpaid)
- Email management and meetings (often unpaid)
- Skill development (unpaid)
Most successful freelancers aim for 20-25 billable hours per week. If you calculate your rate based on a 40-hour billable week, you will fall short of your income goals.
How to Use This Calculator
To get the most accurate result, follow these steps:
- Target Annual Net Income: Enter the amount of money you want to actually take home and spend on your personal life (rent, food, savings).
- Annual Business Expenses: Sum up your website hosting, Adobe/SaaS subscriptions, laptop depreciation, internet, and liability insurance.
- Billable Hours: Be realistic. If you are just starting, 20 hours is a safe average.
- Weeks Off: Don't forget to account for sick days. A standard employee gets ~2-4 weeks off; as a freelancer, you must budget for this time as "unpaid" periods.
- Tax Rate: In many jurisdictions, self-employment tax combined with income tax can range from 25% to 35%. Always overestimate this buffer.
The "Gross Up" Calculation
This tool calculates the Gross Revenue required to hit your Net Income target using the formula: Net Target + Expenses / (1 - Tax Rate). It then divides this Gross Revenue by your total available billable hours per year ((52 - Weeks Off) * Billable Hours/Week) to derive your minimum hourly floor.