Freelance Rate Calculator
Find the hourly rate your income goal, time off, and expenses actually require.
Your numbers
Your hourly rate
Day rate (8h)
$783.76
Weekly rate
$2,449.25
Billable hrs / yr
1,150
- Take-home target
- $80,000.00
- Pre-tax income needed
- $106,666.67
- Business expenses
- $6,000.00
- Revenue to bill
- $112,666.67
Most freelancers set their rate by taking a salary they'd like and dividing by 2,080 hours — and then quietly go broke. That math ignores the time you can't bill, the weeks you take off, your business expenses, and self-employment taxes. This guide shows how to work backwards from the income you actually want to keep.
Why freelancers undercharge
A full-time job hides a lot of costs: paid leave, employer tax contributions, health benefits, equipment, and downtime between tasks. As a freelancer you cover all of it yourself — out of your rate. If you price like an employee, you earn far less than one.
How to calculate your rate
Work backwards from your take-home goal:
- Gross up for tax. If you want $80,000 after a 25% effective tax rate, you need $80,000 ÷ (1 − 0.25) = $106,667 in pre-tax profit.
- Add business expenses. With $6,000/year of software, fees, and equipment, you need $112,667 in revenue.
- Divide by billable hours. At 25 billable hours/week and 6 weeks off, you work 46 weeks × 25 = 1,150 billable hours.
- The rate: $112,667 ÷ 1,150 ≈ $97.97/hour.
That's roughly $784/day — far above the naive "$80,000 ÷ 2,080 = $38/hour" most people start with. The calculator above does this instantly.
Billable vs. working hours
This is the trap. You might work 40 hours a week, but only 20–30 are billable — the rest go to sales, admin, invoicing, and learning. Always base your rate on billable hours, not hours worked, or you'll fall short.
Hourly vs. day vs. project pricing
- Hourly is simple and fair for open-ended work, but caps your income at your time.
- Day rates suit longer engagements and reduce nickel-and-diming.
- Project/value pricing decouples your income from hours — the path to earning more without working more — but requires confident scoping. Your hourly number is still the floor you check every quote against.
How to raise your rate
- Raise prices on new clients first, then existing ones with notice.
- Specialize — niche expertise commands a premium.
- Sell outcomes, not hours, and quote project fees once you can scope reliably.
- Recalculate yearly as your expenses, tax bracket, and time off change.
The bottom line
Your rate must cover taxes, expenses, and unbillable time — divide the revenue you truly need by your billable hours, not your working hours. Use the calculator to pressure-test your number, then treat it as the minimum you'll accept.
Frequently asked questions
How do I calculate my freelance hourly rate?
Work backwards from your take-home goal: gross it up for taxes, add your business expenses to get the revenue you need, then divide by your billable hours per year. The calculator above does this in one step.
Why is my freelance rate higher than an employee salary?
Because you cover everything an employer normally pays for: paid time off, taxes, health benefits, equipment, software, and unbillable hours. A freelance rate that matches a salary ÷ 2,080 actually leaves you earning far less.
How many billable hours are realistic?
Usually 20–30 of a 40-hour week. The rest goes to sales, admin, invoicing, and learning. Always base your rate on billable hours, not hours worked, or you’ll consistently fall short of your goal.
Should I charge hourly or per project?
Hourly is simple but caps income at your time. Project/value pricing lets you earn more without working more, but needs confident scoping. Many freelancers quote projects while using their hourly number as the floor to check each quote against.
How much should I set aside for taxes?
It varies by country and income, but many freelancers reserve 25–35% of profit for income and self-employment taxes. Set the calculator’s tax rate to your situation, and confirm with an accountant for your jurisdiction.
What expenses should I include in my rate?
Everything it costs to run your business: software subscriptions, hardware, professional fees, insurance, marketing, banking/processing fees, and a portion of home-office costs. These are added to the revenue you need before dividing by billable hours.
How often should I raise my rates?
Recalculate at least once a year, and whenever your expenses, tax bracket, or time off change. Raise new-client rates first, then existing clients with notice. Specializing lets you command a premium sooner.
What’s a good day rate for a freelancer?
A day rate is roughly your hourly rate × 8, often with a small premium for booking a full day. At ~$98/hour that’s about $784/day. Use the calculator to derive yours from your income goal rather than guessing.