Freelance Rate Calculator
Our freelance hourly rate calculator turns your income goal, expenses, tax and billable hours into a rate that actually works.
Formula & worked example
Formula: Revenue needed = income ÷ (1 − tax) + yearly expenses. Hourly rate = revenue ÷ billable hours, where billable hours = weekly hours × billable % × working weeks.
Example: 60,000 goal, 25% tax, 500 monthly expenses, 40 h weeks, 60% billable, 6 weeks off: 86,000 ÷ 1,104 h ≈ 77.90 per hour.
Method & source: Revenue-required method: income grossed up for tax, plus expenses, over billable hours. See how we test our calculators.
Next step: try hourly to salary or work hours with breaks or savings goal.
Setting a Freelance Hourly Rate
A freelance rate calculator converts the income you want into the hourly rate you should charge. It starts from your goal and works out how much you must bill after covering business expenses, tax and the reality that not every working hour can be invoiced.
This freelance hourly rate calculator is built around your own numbers: annual income goal, monthly expenses, tax rate, weekly working hours, billable percentage and weeks off.
Turning an Income Goal Into an Hourly Rate
Fill in your target income and how you work. The calculator builds the rate from the ground up.
- Income goal: The take-home profit you want after tax and expenses.
- Tax: Your estimated tax rate on profit, added on top of the goal.
- Expenses: Monthly business costs multiplied by twelve and added to the revenue you need.
- Billable hours: Weekly hours × billable percentage × weeks worked.
- Results: Hourly rate, day rate, weekly revenue and a project price for any number of hours.
Nothing here is tax advice, but it gives you a defensible, number-based starting point for quotes.
Why Setting the Right Rate Matters
Many freelancers underprice because they compare their rate to an employee’s hourly wage, forgetting unpaid time and overheads.
- Cover expenses, tax and holidays without working nights and weekends.
- Stop under-quoting projects.
- Understand how billable percentage changes the rate you need.
- Negotiate with confidence using a transparent formula.
- Plan raises as your costs and goals change.
Pricing from your goals rather than from guesswork is the simplest way to build a freelance business that pays what you need.
Worked walkthrough: a designer’s day rate
A designer wants to take home 48,000 a year, pays 300 a month in software and equipment, estimates 20% tax, works 30 hours a week, bills 65% of those hours and takes 5 weeks off. Income before tax is 48,000 ÷ 0.80 = 60,000; adding 3,600 of expenses makes 63,600 of revenue needed. Working weeks are 47, so billable hours are 30 × 65% × 47 = 916.5. The minimum rate is about 69.39 an hour, or 555 for an 8-hour day. A 30-hour project would be quoted at roughly 2,082 before any buffer for revisions.
Practical tips for Freelance Rate calculations
- Base the billable percentage on your real diary. Time spent on admin, emails, pitching and learning is rarely billable, so 50–70% is typical.
- Set aside tax separately and use a realistic rate. If you are unsure, use a higher percentage – it is safer to over-save than under-save.
- Treat the result as a minimum. Add a margin for slow months, late-paying clients and unpaid revisions.
- Quote projects with the project-hours box and add a contingency of 10–20% for scope changes.
- Revisit your rate once or twice a year. As your skills and costs grow, your number should too.
From income goal to hourly rate
A rate has to cover three things: the take-home income you want, the tax on it, and your business expenses. The calculator grosses the goal up for tax, adds a year of expenses, and divides by the hours you can realistically bill. For example, with a 45,000 take-home goal, 20% tax, 300 a month in expenses, 35-hour weeks, 65% billable time and 5 weeks off, revenue needed is 45,000 ÷ 0.80 + 3,600 = 59,850. Billable hours are 35 × 0.65 × 47 = 1,069, giving 55.97 per hour.
Why billable hours are far fewer than working hours
Admin, marketing, quoting, learning and chasing payments take time you cannot invoice. The billable percentage is the share of your working week that clients actually pay for, and it has a big effect on the result. Track your own diary for a few weeks to set a realistic figure, rather than assuming every working hour is billable.
The calculator counts a working year as 52 weeks minus the weeks off you enter, then multiplies those weeks by your weekly hours and your billable share. With its starting values of 40 hours a week, 60% billable and 6 weeks off, that is 40 × 0.60 × 46 = 1,104 billable hours, against 1,840 hours actually worked.
If you think of your income as a freelance wage, enter it as the take-home goal: what you want to keep after tax and expenses. As a second example, a 40,000 goal with 20% tax and 250 a month of expenses needs 53,000 of revenue a year. On 40-hour weeks with 6 weeks off, the billable share changes the rate like this:
| Billable share | Billable hours a year | Minimum hourly rate | Day rate (8 h) |
|---|---|---|---|
| 50% | 920 | 57.61 | 460.87 |
| 60% | 1,104 | 48.01 | 384.06 |
| 70% | 1,288 | 41.15 | 329.19 |
Holidays, sickness and weeks off
Employees are usually paid for holidays; freelancers are not. Every week off shrinks the weeks you can bill, so the rate must rise to compensate. In the example above, taking 8 weeks off instead of 5 lowers billable hours to 1,001 and lifts the rate to 59.79, about 6.8% higher. Include sickness, public holidays and quiet spells when you enter weeks off.
Hourly, day and project pricing
The day rate here is the hourly rate multiplied by eight, and the weekly figure spreads the required revenue over your working weeks. For a fixed-price project, multiply your estimated hours by the hourly rate and add a buffer for revisions, then compare the total with what the client can pay. In the example, a 40-hour job at 55.97 is roughly 2,239 before any buffer. Treat the calculated rate as a minimum rather than a target. When the work is done, the invoice generator turns your hours and rate into an invoice.
Tax and comparing with a job
The tax figure is a flat percentage used to gross up your income, not a full tax calculation. Self-employment taxes, allowances and thresholds differ by country, so use a percentage that reflects your own situation. To compare a rate with a salaried job, the hourly to salary calculator converts between the two, and the UK take-home pay calculator shows what an employee would keep after tax. If the job pays a higher rate for extra hours, the overtime pay calculator shows what a longer week is worth.
Frequently Asked Questions (FAQs)
Divide the income you want to keep by (1 minus your tax rate) to cover tax, add a year of business expenses, then divide by your billable hours: weekly hours × billable share × working weeks. For example, a 50,000 goal at 25% tax with 500 a month of expenses needs 72,666.67 a year; 40 hours a week, 60% billable and 6 weeks off gives 1,104 billable hours, so the minimum rate is 65.82 an hour.
It is the share of your working hours that you can invoice. Admin, marketing, emails and sales calls are usually unbilled, so 50–70% is common.
Holidays, sick days and public holidays are unpaid when you are self-employed. Fewer working weeks means fewer billable hours, which raises the rate you need.
It is an estimate. The calculator grosses up your income goal by the tax percentage you enter. Check the rules that apply to you or ask an accountant.
Enter the hours you expect for the project in the project field. The calculator multiplies them by your hourly rate; add a buffer for revisions.
Yes. Enter the income you want, your expenses, tax and billable hours, and it works out the hourly rate and day rate you need to charge to reach that income.
The result includes a day rate based on an 8-hour day, so you can quote by the day as well as by the hour.
Start from the weeks you will really work: 52 minus holidays, sick days and public holidays. Multiply by your weekly hours and by the share of that time clients pay for. The calculator’s starting values of 40 hours a week, 60% billable and 6 weeks off give 1,104 hours a year; at 50% billable it is 920, and at 70% it is 1,288. If you are unsure, track your diary for a few weeks and plan on the lower figure.
It depends on your income goal, costs and how much of your time is billable. Enter your own numbers to get a rate that covers them instead of guessing.
Estimates only – not financial advice. Results are estimates based only on the figures you enter and simplified assumptions (constant prices, costs and rates; no unexpected fees). They are not financial, tax or accounting advice. Check important decisions with a qualified professional. See our full disclaimer.