Freelance Hourly Rate Calculator
Enter your income goals, expenses, and tax rate to find the exact hourly rate you need to charge. Never underprice your work again.
How to Use This Calculator
Enter four numbers: the annual income you want to take home after tax, your effective tax rate, your total business expenses as a percentage of revenue, and how many hours per week you can realistically bill. The calculator works backwards from your income goal to find the minimum hourly rate that makes it possible.
The Billable Hours Trap
Most freelancers overestimate billable hours. A 40-hour week does not produce 40 billable hours. Client calls, invoicing, proposals, networking, admin, and professional development all take time — typically 30 to 40 percent of a working week. A realistic billable target is 20 to 25 hours per week, or roughly 1,000 to 1,300 hours per year. Plug in an optimistic number and your calculated rate will be too low to sustain your income.
What to Include in Business Expenses
Business expenses are not just software subscriptions. Include your share of health insurance premiums, professional liability insurance, equipment depreciation, co-working space or home office costs, accounting fees, and any training or courses you buy. A solo freelancer typically has 15 to 25 percent of revenue tied up in these costs before drawing a salary.
Tax Rate by Situation
Self-employment tax in the US adds 15.3 percent on top of income tax, because freelancers pay both the employee and employer portions of Social Security and Medicare. A US freelancer earning $80,000 might face a combined effective rate of 28 to 32 percent. UK freelancers on £60,000 face income tax plus National Insurance. Use your actual effective rate — the percentage of total income paid across all taxes — not your marginal bracket.
Your Rate Is a Floor, Not a Price
The number this calculator produces is the minimum you can charge without taking a pay cut compared to your goals. It is not what you should quote. Research what the market pays for your skills and experience level. If market rate is above your floor, charge market rate. The floor just tells you when to walk away from a client pushing for a lower price.
Once you have your rate, recalculate every 12 months. Inflation, rising expenses, and your own growing experience all push the floor up over time.