Freelance Hourly Rate Calculator

Work out the hourly and day rate you need as a freelancer from your target income, expenses, taxes and billable hours. Free, private, runs in your browser.

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Not ready? Start with Freelance Rate Calculator + Client List (free) or this calculator as a free .xlsx. See all templates.

How the freelance rate formula works

A freelance rate has to pay for three things a salary hides: your own taxes, your business costs and all the hours you work but can't bill. The calculator works backwards from the income you want to keep.

Gross revenue needed = (target take-home income + business expenses) ÷ (1 − tax rate)
Billable hours per year = hours worked per week × billable share × working weeks
Minimum hourly rate = gross revenue ÷ billable hours. Day rate = hourly rate × 8.

Worked example

You want to keep $80,000 a year, spend $10,000 on software, insurance and equipment, and set aside 25% for tax. You need ($80,000 + $10,000) ÷ 0.75 = $120,000 in revenue. Working 40 hours a week for 46 weeks with 60% of that time billable gives 40 × 0.6 × 46 = 1,104 billable hours. Your floor is $120,000 ÷ 1,104 = $108.70 an hour, or about $870 a day.

That is a minimum, not a target. Add a margin for slow months and late payers (see the invoice late fee calculator), and round up to a number that is easy to quote.

Choosing realistic inputs

Billable share: most freelancers bill 50–70% of the hours they work. Sales calls, proposals, invoicing and learning eat the rest.
Working weeks: 52 minus holidays, vacation and sick days. 44–47 is common.
Tax rate: in the US, self-employed people pay self-employment tax (15.3% on 92.35% of net earnings, up to the Social Security wage base) on top of income tax. Use your combined effective rate; an accountant can give you a better number.

FAQ

Should I quote hourly or per project?

Use the hourly floor to price projects: estimate the hours, multiply by your rate and add a buffer of 15–25% for scope creep. Clients often prefer a fixed project price, and you keep any efficiency gains.

What tax rate should I use?

Use your expected effective rate on business profit, including self-employment tax if you are in the US. 25–35% is a common planning range, but your situation may differ. This is not tax advice.

Why is my rate so much higher than my old hourly wage?

An employee's wage excludes employer-paid taxes, benefits, equipment and paid time off, and every hour is paid. As a freelancer you cover all of that yourself and only some hours are billable.