Freelance Hourly Rate Calculator
Free freelance hourly rate calculator. Work out the minimum rate to hit your income target after expenses, taxes, and non-billable hours.
Why a freelance rate needs its own calculation
An hourly rate is not your desired salary divided by 2,080. Freelancers cover their own expenses and tax, take unpaid leave, and spend a large share of the working week on non-billable admin. This calculator works out the minimum billable rate that still delivers your target take-home income once all of that is accounted for — which is usually higher than the number people guess.
How the calculator works
- Gross revenue needed = (target income + business expenses) ÷ (1 − tax rate). The tax is grossed up, not just added, because tax is charged on revenue.
- Billable hours = total working hours × billable percentage.
- Required hourly rate = gross revenue needed ÷ billable hours.
- It also shows the weekly billable load, so you can sanity-check the schedule against reality.
A worked example
A target take-home income of $70,000, $6,000 of business expenses, a 25% tax rate, 2,080 working hours a year, and 70% of those hours billable:
| Step | Calculation | Result |
|---|---|---|
| Gross revenue needed | (70,000 + 6,000) ÷ 0.75 | $101,333 |
| Billable hours | 2,080 × 70% | 1,456 hrs |
| Required rate | 101,333 ÷ 1,456 | $69.60/hr |
| Weekly billable | 1,456 ÷ 48 | 30 hrs |
That is roughly $70 an hour — noticeably more than the $33.65 you get by dividing $70,000 by 2,080, because the naive calculation ignores tax, expenses, and the 30% of the week that is not billable.
The billable-percentage trap
Small changes in the billable share move the required rate sharply, because the same revenue is spread over fewer hours:
| Billable % | Billable hours | Required rate |
|---|---|---|
| 50% | 1,040 | $97.44/hr |
| 60% | 1,248 | $81.20/hr |
| 70% | 1,456 | $69.60/hr |
| 80% | 1,664 | $60.90/hr |
| 90% | 1,872 | $54.13/hr |
Common mistakes
- Dividing income by 2,080. That ignores tax, expenses, and non-billable time, and produces a rate that undercharges.
- Setting the billable percentage too high. Few freelancers bill 90% of their time; marketing, quoting, invoicing, and learning all come out of the same week.
- Forgetting unpaid leave. Holidays and sick days are real weeks with no revenue, so either lower the working hours or account for them in the rate.
- Quoting with no margin. The figure here is a floor, not a target. Add headroom for scope creep, late payment, and the occasional difficult client.
How the tax rate moves the answer
The required rate is sensitive to tax, because tax is grossed up rather than added. At a 25% rate the same target needs $101,333 of revenue and a $69.60 rate. At 40% it needs $126,667 and a rate of $86.99 an hour — a quarter more, from tax alone. Use the effective rate on your whole income, not the marginal rate on your last dollar, or you will overstate the requirement.
Frequently asked questions
Is this my take-home rate?
No — it is the rate you must charge to end up with your target income after tax and expenses. Your effective take-home per billed hour is lower once those are paid.
What counts as business expenses?
Software and subscriptions, equipment, insurance, accounting, professional fees, marketing, and any workspace costs. Estimate honestly; understating them pushes your rate below what you need.
Should I charge this rate to every client?
It is a floor for your average mix of work. Some projects can be priced higher, and retainers can be priced lower in exchange for guaranteed volume — but the average has to clear this number.
How do I turn the rate into a quote?
Should I quote a day rate instead?
Day rates suit work that is hard to estimate in hours, because they shift the conversation to the outcome rather than the clock. Derive the day rate from the hourly one using a realistic number of billable hours — usually seven or eight — and keep the same discipline about non-billable time. A day rate that quietly assumes ten billable hours is just a discount in disguise.
Multiply the rate by your honest hour estimate, then add a contingency. Once agreed, the invoice generator lays the work out line by line, and the salary-hourly converter is useful for comparing the rate against a salaried offer.