How to use the Freelancer Hourly Rate Calculator
Enter the yearly take-home income you want, your business expenses, the share of profit you set aside for tax and a safety buffer. Then enter how many weeks and hours a week you work, and what share of those hours you can bill to clients. The green box is your minimum hourly rate, and the table shows how it changes if you bill more or fewer hours.
Worked examples
Check: $60,000 of revenue over 1,000 billable hours
| Hourly rate: $60,000 ÷ 1,000 | $60.00 |
$60,000 take-home with expenses, tax and a buffer
| Take-home ÷ (1 − 25%) | $80,000 |
| Plus $8,000 of expenses, plus a 10% buffer | $96,800 revenue |
| Billable hours: 46 weeks × 40 h × 60% | 1,104 hours |
| Minimum hourly rate | $87.68 |
| Day rate (8 billable hours) | $701 |
Billing 50% of your hours instead of 60% raises the rate you need to about $105.
Assumptions and limits
- The tax reserve is a planning share you choose, not tax advice; self-employment tax and income tax depend on where you live.
- Billable share covers time spent on admin, sales and learning that clients don’t pay for.
- Unpaid holidays and sick days are handled by the number of working weeks.
Formula
Frequently asked questions
How do I calculate my freelance hourly rate?
Add your income goal, taxes and expenses to get the revenue you need, then divide by the hours you can realistically bill. Most freelancers bill 50–70% of the hours they work.
Why is my freelance rate so much higher than my old salary per hour?
As an employee your employer paid for unbilled time, equipment, benefits and part of your payroll taxes. As a freelancer your rate has to cover all of that.
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Results are estimates for information only and are not financial, tax or legal advice. Tax rules, interest rates and fees change, so confirm important numbers with your bank, employer or a qualified adviser. Read our disclaimer.