Freelance Hourly Rate Calculator
Work backwards from the income you want to the rate you must charge. This calculator accounts for the three things employees never see: business overhead, unbillable hours, and time off.
Gross billing rate before tax. Estimate your tax with the Tax Set-Aside Calculator.
How this calculator works
The formula is simple but unforgiving: (target income + business costs) ÷ billable hours, plus your margin. Each input corrects a mistake that new freelancers routinely make.
Billable hours, not working hours. If you work 40 hours a week, you might bill 25 of them. Proposals, calls that go nowhere, bookkeeping, and marketing are real work that no client pays for. Dividing your income goal by 2,080 hours (a full employee year) instead of your true billable year is how freelancers end up earning less than they did employed.
Weeks off. Employees get paid holidays; you don’t. Six weeks off — four of holiday, a few sick days, a gap between contracts — means your billable year is 46 weeks, not 52. The calculator spreads your annual target across only the weeks you actually work.
Margin. A rate that exactly covers your costs leaves you one slow month from trouble. The margin is your buffer for quiet periods and your room to negotiate down without going underwater. Ten percent is a floor; agencies price with far more.
Worked example
Say you want $90,000 pre-tax, spend $6,000 a year on software, insurance and accounting, bill 25 hours a week, and take 6 weeks off. Your billable year is 25 × 46 = 1,150 hours. You need ($90,000 + $6,000) ÷ 1,150 ≈ $83.50/hour, and with a 10% margin the answer is roughly $92/hour, or about $690 per day. Freelancers who guess usually say “$60” for this scenario — and quietly take a pay cut without noticing.
Country-specific versions
Rates interact with tax and social contributions differently everywhere. See the country editions (in English) for local context: United States, United Kingdom, Canada, Australia.
Frequently asked questions
Why is my freelance rate so much higher than my old hourly wage?
An employee’s wage hides everything the employer pays for: taxes, insurance, equipment, software, holidays, sick days, and the unbillable hours of admin and sales. As a freelancer you fund all of that from billable hours only — typically 50–70% of your working time. Doubling your old hourly wage is a common starting heuristic, and this calculator shows you the precise number instead.
How many billable hours per week is realistic?
Most established freelancers bill 20–30 hours of a 40-hour week. The rest goes to finding clients, proposals, invoicing, bookkeeping, and professional development. New freelancers often bill even less. If you assume 40 billable hours you will underprice — it is the single most common rate-setting mistake.
Should I charge hourly or per project?
Even if you quote fixed project fees, you need an internal hourly rate to price them — estimate the hours, multiply, and add a margin for revisions and risk. Many freelancers move to project or value-based pricing over time, but the hourly baseline from this calculator is what keeps those quotes profitable.
Does this calculator include tax?
The rate it produces is your gross (pre-tax) billing rate — the target income you enter should be your desired pre-tax income. To see how much of that income to set aside for tax in your country, use our Tax Set-Aside Calculator next.
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This tool provides general estimates for planning purposes only and is not financial advice. Figures depend on the assumptions you enter.Full disclaimer.