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Freelance Hourly Rate Calculator

Your Recommended Minimum Rates

Hourly Rate

$0.00

Daily Rate (8h)

$0.00

Annual Gross Revenue Required

$0.00

function calculateFreelanceRate() { var salary = parseFloat(document.getElementById('desiredSalary').value) || 0; var expenses = parseFloat(document.getElementById('monthlyExpenses').value) || 0; var taxPercent = parseFloat(document.getElementById('taxRate').value) || 0; var billableHours = parseFloat(document.getElementById('billableHours').value) || 0; var vacation = parseFloat(document.getElementById('vacationWeeks').value) || 0; var savings = parseFloat(document.getElementById('savingsGoal').value) || 0; if (billableHours = 52) { alert("Please enter valid working hours and vacation weeks."); return; } // 1. Calculate Total Annual Outgoings (Net) var annualExpenses = expenses * 12; var totalNetNeeded = salary + annualExpenses + savings; // 2. Adjust for Taxes (Gross Up) // Gross = Net / (1 – TaxRate) var taxDecimal = taxPercent / 100; var grossRequired = totalNetNeeded / (1 – taxDecimal); // 3. Calculate Working Time var workingWeeks = 52 – vacation; var totalAnnualBillableHours = workingWeeks * billableHours; // 4. Calculate Hourly Rate var hourlyRate = grossRequired / totalAnnualBillableHours; var dailyRate = hourlyRate * 8; // Display Results document.getElementById('hourlyResult').innerText = '$' + hourlyRate.toFixed(2); document.getElementById('dailyResult').innerText = '$' + dailyRate.toFixed(2); document.getElementById('grossResult').innerText = '$' + grossRequired.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resultArea').style.display = 'block'; }

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How to Calculate Your Freelance Hourly Rate

Transitioning from a full-time employee to a freelancer is an exciting move, but one of the biggest challenges is determining how much to charge. Many new freelancers make the mistake of simply dividing their previous salary by 2,000 hours. However, this ignores critical factors like self-employment taxes, overhead, and non-billable time.

Key Components of a Realistic Rate

• Desired Net Income: This is the take-home pay you need to cover your personal mortgage, groceries, and lifestyle.
• Business Expenses: Unlike an employee, you pay for your own laptop, software subscriptions (SaaS), health insurance, and office space.
• Self-Employment Tax: You are responsible for both the employer and employee portions of social security and Medicare, plus income tax. This often ranges from 20% to 35% depending on your location.
• Billable vs. Non-Billable Hours: You won't spend 40 hours a week on client work. You must account for marketing, invoicing, and administrative tasks. Most successful freelancers average 20–30 billable hours per week.

Example Calculation Scenario

Let's look at a realistic example for a freelance graphic designer:

Target Salary: $80,000
Monthly Expenses: $600 (Adobe CC, Coworking, Insurance)
Tax Rate: 25%
Vacation: 3 weeks
Billable Hours: 25 per week

In this scenario, to take home $80,000 after business costs and taxes, the freelancer needs to generate roughly $129,600 in gross revenue. Over 49 working weeks at 25 billable hours each, this requires an hourly rate of approximately $105.79 per hour.

Why Use This Calculator?

This tool goes beyond basic math by incorporating "Gross-Up" logic for taxes and accounting for your specific billable capacity. By ensuring your business expenses and savings goals are included in the baseline, you avoid the common trap of "under-earning" while working harder than you did as a corporate employee.

Disclaimer: This calculator provides estimates based on your inputs. Consult with a tax professional to determine your exact tax obligations and financial requirements.